Bangladesh is set to get its first ever exchange-traded fund (ETF) within three months that will give a new product to investors and contribute to stabilise the stock market.
An exchange-traded fund is a type of pooled investment from investors that operates much like a mutual fund and the difference is it invests in certain stocks that are included in an index, or certain sector or other assets whether mutual fund can invest any stocks and fixed income asset.
The Dhaka Stock Exchange (DSE) announced today that it is going to allow asset managers to launch exchange-traded fund who will invest in certain index and primarily the blue-chip index that is DS-30.
ETFs can be purchased or sold on a stock exchange like a regular stock.
Asset managers will manage fund and provide dividend to the investors where trustee will ensure that all the rules and regulations are complied with and the interests of the unitholders are protected.
Recently, LankaBangla Asset Management, Shanta Asset Management, Green Delta Dragon Asset Management have shown their interest as a sponsor of an ETF and submitted their proposals and applications.
Based on their proposal, the DSE worked with the Bangladesh Securities and Exchange Commission (BSEC) and the regulator has given consent in principle to introduce ETF in the capital market.
The DSE is working fast so that at least one or two ETF can be launched within three months, Tarique Amin Bhuiyan, managing director of the DSE, said today in a press briefing held at the DSE auditorium.
The DSE wants to prepare the market now, he said, adding that it is going to teach people about ETF so that they can realise the product and invest in it.