BGFI Fund Strategy

The strategy for the Fund is based upon a macroeconomic foundation built over 40 years of successful risk management in the global capital markets. RBIMCO, the Asset Manager of the BGFI Fund will implement a “top down” approach based on this cumulative intellectual property and expertise, that will manage the positioning of risk across the yield curve.
We have been active in Bangladesh for over 11 years and have built up a track record in the capital markets along with a substantial research base. We have developed a comprehensive understanding of the fiscal and monetary policy dynamics that will be at the heart of the supply and demand characteristics which shape and price the BGFI yield curve.
Investing and trading in BGFI is a challenging and deliberate process. BGFI analysis and management involves understanding the breadth and depth of the market and various issues outstanding, of which there are currently over 250. The BGFI market is a dynamic market, with weekly and monthly issuance by the government of Bangladesh. This creates significant complexities that requires detailed and specific understanding of fixed income behaviour.
The strategy will require continuous assessment of the yield curve, multiple coupon effects and the inevitable impact on bond convexity in both directions. The Asset Manager is uniquely qualified to successfully implement this strategy, given its proven track record and deep expertise.

Why BGFI

• BGFI is the highest credit quality available in Bangladesh, with no effective risk of default.
• The BGFI market is the single largest asset class in Bangladesh with total outstanding debt of over USD 30 billion in BDT equivalent.
• The BGFI asset class is the only asset class that can offer investors a choice of durations ranging from 91 days to 20 years. Therefore, investors can match a variety of liabilities and income streams needed.
• BGFI assets accrue interest daily and there are no penalties of any nature for the early sale of the asset.
• BGFI assets provide substantial capital gain opportunities in a falling interest rate environment and those capital gains are tax free for individual investors.
• BGFI assets are auctioned monthly by the BD government therefore price discovery is very transparent.
• The BGFI asset class is already actively transacted by all commercial banks in Bangladesh, of which there are over 60
• RBIMCO’s proprietary performance in the BGFI market in the past seven and half years has cumulatively generated total returns of over 132%. Across that timeframe, specifically risk adjusted returns have exceeded DSE returns by a factor of over 28.