Expense Ratio, Liquidity Ratio, Asset Turnover Ratio and Fund Age and two external factors: Market Index and Inflation. It also examines the cointegration relationship between market index, inflation and NAV. This study uses secondary sources of data. The balanced panel data from 5 mutual fund schemes are used for the period of 25 months: from Ashad 2074 B.S to Ashad 2076 B.S. The empirical results obtained from one-way fixed effect model reveal that expense ratio, market index and inflation are the
most significant determinants of mutual fund NAV. NAV is found to respond positively to expense ratio and market index while inflation significantly erodes NAV. The result also shows that there is no long-run equilibrium relationship between market index, inflation and NAV. This suggests that NAV movement in Nepal is not explained by these external factors. These findings have important implications in formulating strategies for existing and upcoming mutual funds in the Nepalese capital market.
ACKNOWLEDGEMENT
On the very outset of this report, I would like to extend my sincere & heartfelt obligation towards all the personages who have helped me in this endeavor. Without their active guidance, help, cooperation & encouragement, I would not have made headway in the report. First of all, I would like to acknowledge Kathmandu University School of Management (KUSOM) for including a Comprehensive Business Research project as partial fulfillment of MBA program, providing all students with the opportunity to enhance their knowledge.
I am extremely thankful and pay my gratitude to my Research Supervisor Prof. Dipendra Karki for his valuable guidance and support on completion of this project. I am ineffably indebted to all my classmates, friends and family who encouraged and contributed their valuable suggestions during the preparation of this project.
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