2 mutual funds at the same time. In which to invest ?

With Citizen mutual fund-1 publishing its offer letter yesterday, it is seen that two mutual funds namely: NIC ASIA Growth fund and Citizen Mutual Fund-1 will be issuing their mutual fund units from the same date, i.e. from Magh 2nd to end it on Magh 8th (if early).

NIC ASIA Growth fund received SEBON's approval on Poush 9th, whereas Citizen got the go-ahead on Poush 17th. Despite SEBON keeping a few days difference in mutual fund's approval in the past, Scenario was different this time. As a consequence, both mutual funds are locking horn on the same date, and this has created perplexity over investors.

Talking about these two mutual funds, both have a fund size of Rs 1 billion and a maturity of 7 years. Both are close-ended in nature and can be traded on the stock market. On top of that, both the mutual funds are backed by renowned commercial banks. So what actually is the distinction between these two mutual funds? Which one should investors opt for? This question has definately kept investors in dilemma. 

The principal difference between these two mutual funds reclines in their investment strategy. NIC ASIA Growth fund is an equity oriented scheme whereas Citizen Mutual Fund-1 is a balanced fund. It implies that NIC ASIA Growth fund will invest a major portion of its capital (80-85%) in equity instruments while Citizen mutual fund-1 being a balanced fund will invest equally in both equity and debt instruments. Thus, two of these mutual funds basically have a different target market.

So, it finally befalls upon the objective and strategy of an investor. One looking for a safe and balanced investment should go for Citizen, as debt investment in the portfolio will be comparatively safer. On the other hand, investors with risk-bearing capacity looking for good growth in their investments can move to NIC ASIA Growth fund, as equity investments provide a higher return than debt investment.