Mutual funds emerged as the stock market’s best-performing sector last week after regulators approved a change allowing funds to retain unrealised gains instead of distributing them as cash dividends.
The mutual fund sector rose 9.30 per cent, outperforming every other segment of the market despite the benchmark DSEX index falling 1.63 per cent during the week, according to Sheltech Brokerage.
Financial institutions also gained 2.60 per cent as investors anticipated stronger earnings, while textiles added 1.42 per cent.
Sheltech Brokerage Research said the regulatory change improved investor sentiment by giving fund managers greater flexibility in portfolio management and reducing pressure to distribute unrealised investment gains.
Trading activity also increased in the sector, with turnover rising 53.80 per cent from the previous week.
Several closed-end mutual funds ranked among the week’s top gainers, led by MBL First Mutual Fund, which surged 47.83 per cent. NCCBL Mutual Fund One and Green Delta Mutual Fund also posted gains of 25 per cent, while LR Global Mutual Fund One rose 21.05 per cent.
Analysts said investors are increasingly positioning for policy-driven opportunities while awaiting further clarity on proposed margin lending reforms and upcoming corporate earnings announcements.
