Mutual Fund Growth in Nepal (2026): AUM, Returns and the SIP Boom
By Wilson Shrestha · Figures checked 20 October 2026
Nepal’s mutual fund industry is small, but it is growing faster than almost any other corner of the capital market. Assets under management (AUM) rose from about NPR 13.6 billion in 2019 to nearly NPR 73 billion in 2026, according to an April 2026 analysis in The Himalayan Times. That is more than a fivefold jump in under seven years.
This guide puts the whole growth story in one place: how big the industry is, what is driving it (hint: open-ended SIP funds), what matured funds really returned, why the sector is still tiny next to India’s, and what to check before you put money in.
Quick answer: mutual fund growth in Nepal at a glance (October 2026)
- Assets under management: nearly NPR 73 billion in 2026, up from NPR 13.6 billion in 2019 (The Himalayan Times).
- Schemes: 60 across 19 licensed fund houses, 46 closed-end and 14 open-end, on one fund tracker’s count of 18 October 2026. Older sources show lower counts because they were published earlier.
- SIP and open-ended funds: from a single scheme with NPR 199 million in 2019 to more than NPR 20 billion across 13 schemes by April 2026.
- Track record: 14 schemes have matured and 11 beat the NEPSE index. Average return was about 15.76% a year against 8.57% for bank fixed deposits over the same periods.
- Still small: mutual funds hold only 1.2% of Nepal’s GDP, against about 19% in India.
- Main risks: equity-heavy portfolios, crowding into banks, hydropower and life insurers, and closed-end units that often trade below NAV.
In this guide
- How big is the industry?
- A short timeline
- Closed-end vs open-end (SIP) funds
- What is driving the growth
- What matured funds actually returned
- Why the industry is still small
- The risks behind the growth
- Tax and costs in 2026
- How to invest step by step
- What comes next
- Why websites quote different numbers
- FAQ
- Sources
How Big Is Nepal’s Mutual Fund Industry in 2026?
The Himalayan Times puts industry AUM at nearly NPR 73 billion in 2026, up from NPR 13.6 billion in 2019. Other snapshots sit lower because they were taken earlier or count assets differently. The Katmandu Journal, for example, reported total assets of NPR 55.8 billion across 54 schemes in the month ending mid-January 2026.
Mutual fund AUM in Nepal (NPR billion)
Sources: The Himalayan Times (22 April 2026), The Katmandu Journal (2 February 2026) and a research paper on the development of mutual funds in Nepal (March 2020 figure). Publishers measure AUM differently, so compare the trend rather than the decimals.
A quick calculation of our own: growing from NPR 13.6 billion to NPR 73 billion over seven years works out to roughly 27% a year, compounded. That is not an investor return. AUM rises when people put in new money, not only when markets go up. What it does show is how quickly savers are discovering the product.
| Metric | Latest figure | Source and date |
|---|---|---|
| Industry AUM | Nearly NPR 73 billion | The Himalayan Times, Apr 2026 |
| Share of GDP | 1.2% (India: about 19%) | The Himalayan Times, Apr 2026 |
| Share of NEPSE market capitalisation | 1.5% | The Himalayan Times (March 2026 data) |
| Number of schemes | 60 (46 closed-end, 14 open-end) | Nepal’s Capitals tracker, 18 Oct 2026 |
| Licensed fund houses | 19 | Nepal’s Capitals tracker, 18 Oct 2026 |
| Open-end AUM | Over NPR 20 billion across 13 schemes | The Himalayan Times, Apr 2026 |
| Matured schemes | 14 | ShareSansar, 20 May 2026 |
A Short Timeline: How Mutual Funds Reached the Mainstream
1993 (2050 BS): NCM Mutual Fund launches and is widely cited as Nepal’s first. Growth stayed slow for years, as an NIBL Ace Capital executive explained in an interview with Business 360.
2067 BS (2010–11): SEBON issues the Mutual Fund Regulation 2067, the rulebook modern schemes still operate under. Mutual Fund Guidelines 2069 follow.
Ashoj 2069 BS (autumn 2012): Siddhartha Investment Growth Scheme-1 (NPR 500 million, five years) receives its licence. It later became the best performer among matured funds.
14 October 2019: NIBL Sahabhagita Fund opens for transactions as the first open-ended scheme under the new regulation. On day one, 2,800 units were sold and 1,500 repurchased, with investors keen to learn about SIPs.
January 2026: SEBON tiers its seed capital rule so established managers can qualify for 5% or 10% instead of 15%.
29 May 2026: Budget 2083/84 makes capital gains tax on listed securities a final tax and promises new financial instruments, institutional investors and alternative investment tools for the capital market.
16 October 2026: Laxmi Sunrise Capital wins SEBON approval to triple its open-ended Shubha Laxmi Kosh from NPR 1 billion to NPR 3 billion, after raising nearly NPR 1 billion within a year of launch.
The Real Story: Closed-End Funds Gave Way to Open-End SIP Funds
Through the 2010s, almost every Nepali mutual fund was closed-end: a fixed pool raised once, listed on NEPSE and wound up on a set date. The newer wave is open-end. You buy and redeem units at net asset value (NAV), there is no maturity date, and you can invest monthly through a Systematic Investment Plan (SIP).
How a mutual fund works in four steps
1. You buy units
Many investors pool money, from as little as NPR 1,000 in some open-end schemes.
2. A licensed manager invests
A SEBON-licensed merchant bank spreads the pool across shares, bonds and deposits.
3. NAV is reported
NAV per unit is assets minus liabilities, divided by units. Fund houses publish monthly reports.
4. You earn two ways
NAV growth plus dividends. Open-end funds can reinvest dividends into more units.
| Feature | Closed-end fund | Open-end (SIP) fund |
|---|---|---|
| How you buy | On NEPSE through a broker, with a demat account and MeroShare | Directly from the fund manager at NAV; new issues via MeroShare or C-ASBA |
| Price you pay | Market price, which can sit above or below NAV | NAV on the transaction day |
| Maturity | Fixed (five, seven, ten years or more); wound up and paid out at NAV | None; stay as long as you like |
| Selling | Any NEPSE trading day, at the going price | Redeem with the fund manager at NAV; an exit load may apply |
| Regular investing | Not built in; you buy units like shares | Yes, SIP instalments are the main selling point |
| Typical costs | Broker commission, SEBON fee and DP charge | No NEPSE brokerage; check the offer document for exit load and other charges |
Number of mutual fund schemes in Nepal over time
Green = closed-end funds listed on NEPSE. Amber = open-end funds.
Sources: ShareSansar monthly mutual fund reports (December 2023 to November 2025), ShareSansar (20 May 2026) and Nepal’s Capitals (18 October 2026). Compilers differ, so treat the series as indicative. Closed-end counts dip when funds mature and delist.
Three things stand out. Open-end schemes doubled from 7 in December 2023 to 14 by May 2026. The listed closed-end count wobbled through 2024–25 as funds matured, then climbed. And open-end funds now hold close to 30% of active-fund assets, with the three largest funds by AUM all open-ended, according to The Himalayan Times.
Entry tickets are small. Citizens Sadabahar, an open-end scheme offered in mid-2025, accepted investments from NPR 1,000, offered a SIP option and took applications through MeroShare or C-ASBA member banks.
What Is Driving the Growth?
- A track record that beat the index. Eleven of the 14 matured schemes outperformed NEPSE over their lives, which gives savers evidence rather than marketing.
- Fixed deposits stopped being the easy answer. The Himalayan Times notes FD rates approached 10% between FY 2021 and FY 2024, and mutual funds still held their ground. Our SIP calculator guide found most bank FDs between roughly 3% and 5.8% in September 2026, and our fixed deposit rate guide tracks the latest bank-by-bank rates.
- SIPs lowered the barrier. Monthly investing from NPR 1,000 turns a mutual fund from a lump-sum decision into a habit. Open-end AUM grew from NPR 199 million to over NPR 20 billion in under seven years.
- Bank-backed distribution and better rails. The 14 matured funds were run by nine merchant banks, several of them bank subsidiaries. MeroShare, C-ASBA and mobile banking make applying and paying easier; see our guides to opening a demat account and neo banks in Nepal.
- A regulator willing to adjust. The January 2026 seed capital change shows SEBON will lower barriers for managers with a proven record, and 19 licensed fund houses now compete for investors.
What Did Matured Mutual Funds Actually Return?
Fourteen schemes had matured by 20 May 2026. ShareSansar’s study lists each fund’s total distribution and average annual figure. We ranked them below.
Average annual distribution of the 14 matured funds (% a year)
Amber = five-year funds. Green = seven-year funds.
Source: ShareSansar, 20 May 2026. Figures are simple averages of total distributions, including the premium on refunded NAV for some funds.
| Group | Funds | Average annual distribution |
|---|---|---|
| Five-year schemes | 5 | 25.25% |
| Seven-year schemes | 9 | 12.61% |
| All matured schemes | 14 | 17.12% |
| Median fund (our calculation) | 14 | About 14.1% |
| Average excluding SIGS1 (our calculation) | 13 | About 14.7% |
The headline 17.12% is pulled up by two outliers. The typical matured fund returned closer to 14% a year, which is still well above what most bank deposits paid over the last few years.
Three things the headline averages hide
- These are simple averages, not compounded returns. SIGS1’s 48.44% a year is its 242.20% total distribution divided by five, and NBF1’s 33.30% is 166.5% divided by five. The Himalayan Times uses an annualised measure instead: it puts the best funds near 35% a year and the all-fund average at 15.76%. Neither is wrong, but they are different yardsticks, so do not mix them.
- Timing mattered. The five-year funds ran through a strong bull market. The seven-year funds lived through one bullish and two bearish cycles, which ShareSansar links to their lower average.
- Not everyone beat par. NIBL Pragati Fund refunded NAV of Rs 9.58, below its Rs 10 par value, and Global IME Samunnat Scheme 1 paid dividends in only two fiscal years.
Against deposits, The Himalayan Times reports that matured funds averaged 15.76% a year versus 8.57% for the average fixed deposit over the same periods, and 11 of the 14 beat NEPSE. Past results do not guarantee future ones, and the next generation of funds is much larger.
Why Is the Industry Still So Small?
Even after the surge, mutual funds hold just 1.2% of GDP and 1.5% of NEPSE’s market capitalisation (March 2026 data). India’s industry is about 19% of its GDP. The Himalayan Times does the arithmetic for Nepal’s GDP of roughly NPR 6.1 trillion in FY 2024/25:
| Penetration of GDP | Mutual fund AUM needed |
|---|---|
| Today (1.2%) | About NPR 73 billion |
| 5% | About NPR 305 billion |
| 10% | About NPR 610 billion |
The seed capital squeeze
Until January 2026, fund managers had to invest 15% of a fund’s corpus as seed capital. The Himalayan Times estimates that locked up about NPR 10.96 billion across the industry’s 56 active schemes, and cites CARE Ratings Nepal’s July 2024 finding that one mid-sized manager’s commitment exceeded its whole paid-up capital. The more a fund grew, the heavier the burden became.
The January 2026 revision lets managers with three or more years of operations, AUM above NPR 1 billion and NAV consistently above face value pay 5% or 10% instead. Newer and smaller managers still pay 15%. Closed-end schemes also need 85% public subscription, which protects retail investors but adds friction.
The Risks Behind the Growth Story
1. Fund managers crowd into the same sectors
In the month ending mid-January 2026, commercial banks took 18.5% of mutual fund investment, hydropower 13% and life insurers 12.1%. That is about 43.6% in three sectors, which The Katmandu Journal described as nearly half the industry’s allocated capital. NEPSE is small, so many funds end up holding the same names. If you own several funds, you may own the same stocks several times.
Commercial banks’ share of total mutual fund investment (%)
Sources: ShareSansar monthly mutual fund reports and The Katmandu Journal. The bank share has eased from about 24% to 18.5%, a small sign of diversification, but three sectors still dominate.
2. Closed-end units often trade below NAV
On 18 October 2026, Nepal’s Capitals reported that the average closed-end unit traded 6.76% below its NAV, with 38 of 46 funds at a discount. Muktinath Mutual Fund 1, for example, had an NAV of Rs 9.94 and a last price of Rs 9.20. A discount can be a bargain or a sign of thin trading, and either way it will not show up in a fund’s headline return.
3. NAVs fall in bad months
In Ashwin 2082, NIBL Sahabhagita Fund’s NAV fell 8.91%, the biggest monthly drop in ShareSansar’s monthly review. In the same month, Himalayan 80-20 reported its NAV slipping from Rs 11.39 to Rs 10.69 with a net loss of Rs 9.46 crore. Mutual funds soften market swings; they do not remove them.
4. Results vary enormously by fund and timing
Among matured funds, average annual distributions ranged from 8.11% to 48.44%. Manager choice, fund structure and the market cycle you happen to launch into all matter. Open-end funds also have no maturity date, so there is no wind-up payout to count on; you exit by redeeming at NAV, and any exit load or fee in the offer document applies.
Tax and Costs for Mutual Fund Investors (2026 Rules)
Budget 2083/84 made capital gains tax (CGT) on listed securities a final tax. The rate then changed twice in 2026, and some news coverage from June still shows the older figures. For resident individuals, our NEPSE share calculator guide, which follows the Nepal Gazette notice of 22 September 2026, lists these rates:
| Period | Held 365 days or less | Held more than 365 days |
|---|---|---|
| Before 17 July 2026 | 7.5% | 5% |
| 17 July to 21 September 2026 | 10% | 7.5% |
| From 22 September 2026 | 5% | 3.75% |
If you buy listed closed-end units through a broker, you also pay trading costs. The same guide lists these for mutual funds:
| Cost | Rate |
|---|---|
| Broker commission | 0.15% up to NPR 5 lakh, 0.12% up to NPR 50 lakh, 0.10% above (minimum Rs 10) |
| SEBON fee | 0.010% |
| DP charge | Rs 25 per company per transfer day |
One structural advantage: The Himalayan Times notes that the fund itself pays no corporate income tax on its investment income or capital gains, so returns are not taxed twice at fund level.
What this section does not settle: how fund dividends and open-end redemption gains are taxed depends on the instrument and holder type, and the 2026 rules changed more than once. Read the scheme’s offer document, confirm with your fund manager or a tax professional, and use the Mutual fund option in the NEPSE share calculator to see net profit after fees and tax.
How to Invest in Mutual Funds in Nepal: A Practical Path
- Open a demat account and activate MeroShare. You need this to hold listed closed-end units and to apply for new schemes. Start with our demat account guide, understand Mero Share vs demat account, and keep the Mero Share problems and fixes page handy.
- Link a bank account for C-ASBA. New scheme issues are applied for through MeroShare or C-ASBA member banks during the offer window.
- Choose your route. An open-end SIP invests a fixed amount at NAV on a schedule, so there is no market timing. A listed closed-end fund is bought on NEPSE through your broker’s TMS at the market price, which may be below NAV.
- Check the fund before you buy. Look at:
- NAV compared with the Rs 10 par value
- Premium or discount to NAV, for listed funds
- Maturity date, if it is a closed-end scheme
- Sector mix, to avoid holding the same bets twice
- The manager’s record on earlier matured funds
- Fees and exit load in the offer document
- Run the numbers. Project a monthly plan with our SIP calculator for Nepal and check net profit after costs with the NEPSE share calculator.
- Review on a schedule. Fund houses publish monthly NAV and portfolio reports. Compare them with NEPSE rather than checking daily.
New to the whole process? Our step-by-step guide to online investing in the Nepal share market covers account setup in more detail, and the Finance & NEPSE guides collect the rest. None of this is personal investment advice; match the product to your goal and time horizon.
What Comes Next for Mutual Funds in Nepal?
- Reform proposals. The Himalayan Times analysis argues for capping seed capital in absolute rupee terms, a risk-based classification of funds, faster approval of open-end SIP schemes and a framework for limited foreign investment. These are proposals, not rules.
- A maturity wave. Seven-year funds still running are expected to mature by 2030, and ShareSansar expects funds with ten-year or longer tenors to follow.
- Bigger open-end schemes. Shubha Laxmi Kosh’s approval to triple in size also comes with a Systematic Withdrawal Plan (SWP) alongside its SIP, a sign that products are getting more flexible.
- Policy support. Budget 2083/84 promises new financial instruments, institutional investors and alternative investment tools. If AUM reached 5% of GDP it would be about NPR 305 billion, more than four times today’s level.
Why You See Different Numbers on Different Websites
Ask five sources how many mutual funds Nepal has and you will get several answers. Here is why:
| Source | Date | What it reported |
|---|---|---|
| The Katmandu Journal | Month to mid-Jan 2026 | 54 schemes; NPR 55.8 billion in assets |
| The Himalayan Times | Apr 2026 | 56 active schemes (13 open-end); nearly NPR 73 billion |
| ShareSansar | 20 May 2026 | 43 listed closed-end and 14 open-end; 4 more issued but unlisted and 1 open for issue |
| Nepal’s Capitals | 18 Oct 2026 | 60 schemes from 19 fund houses (46 closed-end, 14 open-end) |
- Dates differ. New schemes are approved and listed almost every month.
- Definitions differ. Some counts include only listed funds; others include schemes that are approved or still under issue.
- Matured funds drop out. A closed-end fund leaves the count when it matures.
- Size measures differ. AUM, fund size and NAV are not the same number. When you quote a figure, quote its date and source too.
Frequently Asked Questions
How fast are mutual funds growing in Nepal?
Industry AUM grew from NPR 13.6 billion in 2019 to nearly NPR 73 billion in 2026, more than fivefold, according to The Himalayan Times. Open-end funds grew faster still, from NPR 199 million in one scheme to over NPR 20 billion across 13 schemes.
How many mutual funds are there in Nepal?
One fund tracker listed 60 schemes from 19 fund houses on 18 October 2026: 46 closed-end and 14 open-end. Earlier sources show 54 to 56 schemes because they were published months before.
What returns have mutual funds given in Nepal?
Fourteen schemes have matured and 11 beat NEPSE. The Himalayan Times reports an average of about 15.76% a year against 8.57% for fixed deposits. ShareSansar’s average annual distribution is 17.12%, and the median fund is about 14.1% by our calculation. Past returns do not guarantee future ones.
What is the difference between open-end and closed-end mutual funds?
A closed-end fund raises a fixed pool, lists on NEPSE and matures on a set date. An open-end fund issues and redeems units at NAV with no maturity date, and usually supports SIP instalments.
What is the minimum amount to start a mutual fund SIP in Nepal?
Some open-end schemes accept investments from NPR 1,000, as Citizens Sadabahar did in 2025. Minimums differ by scheme, so check each offer document.
Are mutual fund gains taxed in Nepal?
The fund itself pays no corporate income tax on its income or gains. For individuals selling listed units, our NEPSE share calculator guide lists capital gains tax of 5% (held 365 days or less) or 3.75% (held longer) from 22 September 2026. Fund dividends and open-end redemptions can be treated differently, so check the offer document and the latest Finance Act.
Is a mutual fund better than a fixed deposit?
They do different jobs. A fixed deposit pays a contractual rate, while a mutual fund is market-linked and its NAV can fall. Matured funds beat deposits on average in the data above, but individual funds and individual months varied widely. Match the choice to your time horizon, and treat this as information rather than advice.
Why is mutual fund AUM so low compared with India?
Nepal’s mutual fund AUM is about 1.2% of GDP versus about 19% in India. Heavy seed capital rules, a small listed market and a young industry all play a part, and SEBON began easing seed capital in January 2026.
Bottom Line
Mutual fund growth in Nepal is real, concentrated in open-end SIP funds, and backed by a decent track record. It is also uneven, equity-heavy and still tiny against the economy. Use dated numbers, compare funds on NAV, discount, sector mix and maturity, and size your SIP with the SIP calculator before you commit. For other ways to put money to work, see how to invest in index funds.
Sources and data notes
- The Himalayan Times, “High returns, low scale: The Nepal paradox” (22 April 2026)
- ShareSansar, “How Matured Mutual Funds Performed in Nepal” (20 May 2026)
- Katmandu Journal, “Nepal’s mutual-fund industry is booming” (2 February 2026)
- Nepal’s Capitals, scheme page and market overview (18 October 2026)
- ShareSansar monthly mutual fund review, Ashwin 2082 and Jestha 2082
- ShareSansar, Shubha Laxmi Kosh approval (16 October 2026)
- ShareSansar, Citizens Sadabahar open-end scheme (9 July 2025)
- ShareSansar, NIBL Sahabhagita Fund opens (15 October 2019)
- Business 360, interview with an NIBL Ace Capital executive
- NepseTrading, Budget 2083/84 stock market announcements
- Securities Board of Nepal (SEBON) for official scheme approvals and notices
Disclaimer: this article is for information only and is not investment, tax or legal advice. Mutual fund values can fall as well as rise. Medians and the ex-SIGS1 average are our own calculations from ShareSansar’s per-fund figures. Confirm current rates and scheme terms with SEBON, your fund manager or a qualified adviser before investing.