NBF2 vs NBF3: Which Nabil Balanced Fund Trades Cheaper to NAV

Putting NBF2 and NBF3 side by side on the figures that actually decide returns - NAV, price, discount, dividend, portfolio and size - so you can see which scheme the data favours today.

Head-to-head at a glance

NAV and price

On net asset value, NBF2 is the higher of the two at Rs 10.36, versus Rs 10.27 for the other. On valuation, NBF2 trades at the deeper discount to NAV (-4.73% versus -2.63%), so it is the cheaper entry relative to its assets right now.

Dividend and yield

NBF2 carries the higher expected distributable dividend (5.70% versus 4.70%). A higher expected yield can mean more income, but it also depends on the fund realising and distributing those gains.

Portfolio and size

NBF3 runs the more equity-heavy book (76.2% in shares), which usually means more upside in a rising market and more drawdown in a falling one. NBF3 is the larger fund by paid-up size (Rs 1.25 arba (Rs 125.0 crore)).

Which one do the numbers favour?

If you are hunting value, the deeper discount sits with NBF2. If income is your priority, the higher expected yield is on NBF2. Neither is a recommendation. Same-house schemes often overlap heavily in holdings, so also check how similar their portfolios are before choosing.

Where this sits in Nepal's fund market

Nepal's mutual fund industry has grown to 58 schemes run by 19 licensed fund houses, split between 44 closed-end funds that trade on NEPSE and 14 open-end funds bought and sold at NAV. For ordinary savers, a mutual fund is the simplest way into the share market: a professional manager pools money from thousands of investors and spreads it across dozens of listed companies, so you get diversification and expertise without picking stocks yourself. Across the closed-end schemes the average unit currently trades at -4.46% to NAV, and 29 of them sit at a discount - a reminder that even inside one asset class the numbers vary widely, which is exactly why comparing the underlying data matters.

The key terms, explained

If you are new to Nepali mutual funds, these are the words that do most of the work in this article:

• NAV (net asset value): the per-unit book value of a fund - the total worth of everything it owns minus what it owes, divided by units outstanding. Each fund house publishes it in a monthly report.
• LTP (last traded price): the price a listed, closed-end scheme last changed hands at on the Nepal Stock Exchange (NEPSE).
• Premium / discount to NAV: the gap between market price and NAV. Trading below NAV is a discount (you buy assets for less than book value); trading above is a premium.
• Distributable dividend: the share of realised gains and income a scheme is legally allowed to pay out to unit-holders.
• Closed-end vs open-end: 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 on demand at NAV, with no maturity.
• AUM / paid-up size: how much money the scheme manages - a rough gauge of its scale and liquidity, quoted in crore and arba (1 arba = 100 crore = Rs 1 billion).

Risks worth keeping in mind

Mutual funds are diversified, but they are not risk-free. A few things to weigh before you invest:

• Market risk: most Nepali schemes are equity-heavy, so their NAV rises and falls with NEPSE. A weak market drags the whole fund down.
• Concentration: funds from the same house often hold many of the same stocks, so owning several may diversify you less than it appears.
• Liquidity and the discount: a closed-end unit is only worth what a buyer will pay on NEPSE that day; thin trading can widen the discount when you want to sell.
• Maturity: at maturity the scheme winds up and pays out at NAV, so the discount typically narrows as that date nears - timing matters.
• Data lag: NAV is disclosed periodically, so the figure you see may trail the fund's real-time value between reports.

How to start investing in Nepali mutual funds

Getting started is more straightforward than most first-time investors expect. The practical path looks like this:

1. Open a demat account and BOID through any depository participant (a bank or broker), then register on MeroShare - this is your gateway to holding and applying for securities online.
2. Link a bank account for ASBA/C-ASBA so you can apply for new fund offerings and debenture issues directly from your bank.
3. Decide your style: buy a listed closed-end scheme any trading day on NEPSE through your broker's TMS, apply for an open-end scheme at NAV, or subscribe to a systematic plan (SIP) that invests a fixed amount every month.
4. Mind the costs and tax: factor in brokerage, and remember that dividends and capital gains are taxable in Nepal - check the current rates before you invest.

A mutual fund suits investors who want exposure to the share market without the time or expertise to pick individual stocks. Start with an amount you can leave invested, compare a handful of schemes on the numbers, and review your holdings each time the AMCs publish fresh monthly reports.

Disclaimer. This article is informational and is not investment advice or a recommendation to buy or sell any security. Every figure is sourced from primary AMC disclosures and SEBON filings and is recomputed each trading day. Confirm the latest numbers before acting.