The country’s first fund management company is “doing pretty well”
Investment Despite the domestic economy going through a liquidity crunch, the country’s first fund management company, which started commercial operations three months ago, is seeing a positive response from investors.
In another few weeks, the company is expecting inflows that would double the present turnover.
“The company is doing pretty well and, had not for the liquidity crunch, the turnover would have been in billions,” the company’s chief executive, Sonam Tobgay, said.
The company, which basically manages investors’ money, by investing them elsewhere and promising a certain rate of return, started off with Nu 20M contributed by its promoters.
So far, it has launched four products, Tsukdey I and II, Zodra I and a retirement saving plan.
The minimum investment size is Nu 10,000.
Sonam Tobgay said the good turnout could be attributed to proper cash flow management, marketing strategies, attractive returns, as well as investment size. “Even if you don’t have Nu 10,000, you can pay Nu 1,000 a month and get returns on it,” he said.
The other reason, he said, was because the company kept track of the cash flows on a daily basis.
“We look at how much money has come in, and how much has gone out during a day’s time, so that we know exactly if the money is being utilised properly,” he said.
For Tsukdey I, the company promises an annual fixed return of 4 percent plus 70 percent of the profit it makes from its investments.
For Tsukdey II, it is 80 percent of the profit.
There are also other incentives like free insurance.
The fund management also offers a retirement scheme, in which an employer and the employee contribute 5 percent to 8 percent of the salary for an annual return of 7.5 percent. This return is also compounded annually.
The national pension and provident fund provides an annual interest of 5.5 percent on its provident fund.
“It would be much better if we could attract big government corporations like Druk Green Power corporation and the Bhutan Power corporation in our scheme,” he said.
Today, the company is investing mostly in listed companies and manufacturing and services companies.
“We look at their book of accounts, and select only those which can guarantee returns,” he said. “We can’t afford to take risks now, but we’re building on our reserves so that, in future, we can afford to take higher risks and guarantee higher returns at the same time.”
By Nidup Gyeltshen