In an open-ended mutual fund, investors are constantly entering and exiting, and every buy or sell is priced against the fund's net asset value (NAV) — the per-unit value of everything the fund holds. If a fund's NAV calculation is imprecise, some clients end up unfairly penalized — either overpaying on entry or undercompensated on exit. In practice, calculating an accurate NAV in Bangladesh's market isn't always straightforward. The following real-life examples demonstrate why.
I. When market prices stopped reflecting reality
During the period when floor prices were active on the stock market (July 2022 – January 2024), quoted market prices no longer reflected underlying value. In response, we adjusted our NAV-calculation methodology to incorporate block market data, where transactions were still occurring below the regulator-imposed floor. These block market prices painted a more honest picture of what securities were actually worth.
II. When bond pricing needed a second source
EDGE maintains mark-to-market accounting for its bond holdings using primary auction yields, since Bangladesh's secondary market yield curve is still not fully reliable. However, auctions happen with a lag, and markets can move faster than that lag allows. When they did, we supplemented primary auction data with direct price quotations from counterparties to keep NAV reflective of real conditions.
III. When a thinly traded bond risked overstating value
The Ashuganj Power bond is listed, so EDGE initially priced it using market transactions. But because it traded thinly, occasional prices didn't always reflect its true intrinsic value. To avoid overstating NAV on the back of an unreliable print, we shifted to cost-plus-accrual accounting instead.
None of these solutions is perfect — fair-value estimation rarely is. But the standard we hold ourselves to is consistent: when the obvious data point would produce an unfaithful number, we look for the fairer one.
