Nepal’s SIP Market Doubles in Two Years as Investors Shift to Disciplined Investing
Nepal’s mutual fund industry is witnessing rapid growth, with SIP funds doubling in number as investors move toward structured investing.Rising AUM, varying dividend performance, and strong equity participation highlight a maturing capital market driven by long-term investment strategies.
Nepal’s mutual fund landscape is witnessing a structural shift, with Systematic Investment Plans (SIPs) rapidly gaining traction among retail investors. The number of SIP funds has nearly doubled—from seven in 2024 to thirteen by early 2026—signaling a growing preference for disciplined, long-term investing in the country’s evolving capital market.
The expansion is largely driven by open-ended mutual funds, which allow continuous entry and exit at Net Asset Value (NAV), making them particularly attractive for monthly investment strategies.
Six New SIP Funds Enter the Market in 2025
The year 2025 marked a significant expansion phase, with six new SIP funds launched by major capital companies:
Sanima Flexi Fund — Sanima Capital
Prabhu Systematic Investment Scheme — Prabhu Capital
Citizen Sadabahaar Yojana — Citizen Capital
Nabil SIP (NA31) — Nabil Investment
NIC Asia Equity Linked Investment — NIC Asia Capital
Machhapuchhre SIP Plan — Machhapuchhre Capital
With the exception of NIC Asia Dynamic Debt Fund, which follows a fixed-income strategy, all newly introduced funds are primarily equity-oriented—highlighting a broader industry tilt toward higher-return, market-linked products.
Dividend Trends Highlight Performance Divergence
Dividend distribution remains a key metric for Nepali investors evaluating SIP funds. Data from 2025 shows a clear divergence between equity and debt-oriented schemes.
NIBL Sahabhagita Fund emerged as a standout performer, delivering cumulative dividends of 76.45% over six years—equivalent to an average annual yield of approximately 12.74%.
Shubhalaxmi Fund reported a 16% dividend in 2025, reinforcing its position among consistent payers.
In contrast, newer or smaller funds such as NMB Saral Bachat Fund (0.27%) and Kumari Sunaulo Yojana (0.8%) reported modest payouts, while recently launched 2025 funds have yet to declare dividends due to their limited operating history.
Meanwhile, the NIC Asia Dynamic Debt Fund continued to deliver steady and predictable returns, with cumulative dividends of 41.55% over five years, underscoring the relative stability of debt-oriented strategies.
NAV Performance Tracks Market Volatility
Net Asset Value (NAV), a key indicator of fund performance, closely mirrored movements in the Nepal Stock Exchange (NEPSE) throughout 2025.
At NEPSE’s peak of 2795, leading funds such as Shubhalaxmi Fund and Kumari Sunaulo Yojana recorded NAV levels above 12.3.
During market corrections near 2487, NAVs across funds declined below 10.
Despite volatility, most established funds maintained NAVs above their base value, reflecting relatively resilient portfolio management.
Newly launched SIP funds, however, remain in early stages, with insufficient historical data for meaningful NAV trend analysis.
Assets under Management Reflect Investor Confidence
Assets under Management (AUM) and fund size growth indicate increasing investor participation in SIP products.
NIBL Sahabhagita Fund leads the market with approximately NPR 600 crore in AUM.
NMB Saral Bachat Fund follows with around NPR 400 crore.
Among newer entrants, Sanima Flexi Fund has accumulated NPR 50 crore.
In terms of growth rates, Siddharth Systematic Investment Scheme recorded a 94.46% increase in fund size, while Kumari Sunaulo Yojana expanded by 83.07%, reflecting strong inflows and rising investor confidence.
Operational Challenges Persist Despite Growth
Despite rapid expansion, operational inefficiencies remain a concern. Investors have reported delays in SIP unit visibility within demat accounts.
Market participants attribute this issue to administrative bottlenecks at the regulatory level, particularly involving the Securities Board of Nepal (SEBON). Capital companies confirm that while transactions are executed in real time, system-level updates in demat records may lag.
Investment Strategies Vary by Fund Type
SIP funds in Nepal can broadly be categorized into three investment approaches:
Equity-Oriented Funds: Allocate 80–85% of assets to stocks, offering higher return potential with increased volatility.
Debt-Oriented Funds: Focus on fixed-income instruments such as bonds and deposits, delivering stable and predictable returns.
Hybrid Funds: Combine equity and debt exposure, though this category remains underdeveloped in Nepal.
The dominance of equity-oriented funds reflects a market-wide appetite for growth, particularly among younger investors.
Outlook: Growth Expected to Continue
Nepal’s SIP ecosystem remains in a growth phase, supported by increasing financial awareness, digital investment platforms, and a gradual shift from speculative trading toward structured investing.
However, market performance will remain closely tied to broader equity trends, and dividend consistency is likely to vary significantly across fund types.
For investors, fund selection will depend on risk tolerance, return expectations, and investment horizon—factors that are becoming increasingly central as Nepal’s capital market matures.
(This report is for informational purposes and does not constitute investment advice.)