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MUTUAL FUNDS-1.pptx
1. Presented By :
ï¶ Waleed Bin farooq
ï¶ Muzamil Irshad
ï¶ Arsal Rehman
ï¶ Umer Sajjad
ï¶ Muhammad Rashid
2. Table of contents
ï Mutual Funds
ï Who Manages Mutual Funds?
ï Net Asset Value
ï Types of Mutual Funds
ï History of mutual funds in Pakistan
ï Major Market Players
ï Islamic Mutual fund industry
ï Mode of investment
ï Challenges Faced By Islamic Funds
ï Funds being Operated in the Market
ï Advantages of investing in Mutual funds etc.
3. Mutual Funds
A mutual fund is a company that collects money from
many investors and invests in securities such as stocks,
bonds, and short-term loans. The combined holdings of
mutual fund is known as its portfolio. Investors buy
shares in Mutual Funds. Each share represents the share
of the investor's ownership in the fund and the income
he generates.
4. Who Manages Mutual Funds
ï¶ Mutual funds are managed by the Banks
ï¶ The portfolio of mutual funds is managed by the
portfolio manager
ï¶ Portfolio Managerâs responsibility is to invest, and to
fulfill the desires of the investors
ï¶ Everyday portfolio manager counts up the value of all
funds holding, figures out how many shares have been
purchased by shareholders and then calculate the net
asset value of mutual funds
5. Net Asset Value
ï Net asset value of funds fluctuates with the value of its
investments
ï Formula used to calculate NAV is as under:
NAV = M.V of all securities held by fund + cash -
liabilities Ă· Total funds shares outstanding
6. Types of Mutual Funds
There are 2 types of Mutual Funds
ï¶ Open ended mutual funds
An investment company that stands ready to buy and sell
shares at any time with the investors
ï¶ Closed ended mutual funds
An investment company with a fixed number of shares that
are bought and sold only in the open stock market.
7. HISTORY OF MUTUAL FUNDS IN PAKISTAN
ï¶ In 1962 - The Pakistani government launches NITL ( National
investment trust limited) Pakistan's first Open End Mutual Fund - NIT
ï¶ 1966 - The Pakistani government launches the ICP launching a series
of Closed End Funds ( The close end fund is a type of mutual fund that
provides a fixed number of shares with a single initial public offering
(IPO) to increase initial investment).
ï¶ In 1994-95 - Additional funds were introduced in the private sector
ï¶ In 2006 - A total of 30 AMC (Asset management company ) holds 56
Mutual Funds.
8. ï¶ One of the fastest growing sector but as compared
to the rest of the mutual fund industry, it is in the
process of growth and development.
ï¶ Currently, about 250 Islamic institutions in 75
countries, managing mutual funds.
ï¶ There exists a total of ïŒ20,billions worldwide
Mutual Funds out of which there are 5900 million are
worldwide Islamic Mutual Funds.
ï¶ Also including that worldwide Islamic Mutual Funds
are ïŒ5900 millions out of which ïŒ160 millions are
Pakistan Mutual Funds as stated bellow.
10. Major Market Players
ï¶ National Investment Trust Ltd.
The company was consolidated as a closed fund and its main function was to
invest in shares and securities in both domestic and international markets.
ï¶ JS ABAMCO Ltd.
It was established in 1995 in Karachi. it Provides professional services related to
asset management, investment advice, and pension fund management.
ï¶ Arif Habib Investment Management Ltd.
The Company is registered as a Pension Fund Manager under the Voluntary
Pension Schemes Act, 2005, as an Asset Management Company and an
Investment Adviser under the Non-Banking Companies Act (Establishment Act),
2003. MCB-AH is a member of the Mutual Funds Association of Pakistan
(MUFAP)
11. ï¶ Al Meezan Investment management Ltd.
Al Meezan investment management Ltd. Is the company which gives Asset Management, Voluntary Pension Scheme
Management and Investment Advisory Services.
ï¶ Atlas Asset Management Ltd.
Atlas Asset Management Limited (AAML), a subsidiary of Atlas Group, was established on 20 August
2002. as an unregistered public company and registered with the Securities and Exchange Commission of
Pakistan as an open and closed asset management company. AAML is also a licensed pension fund
manager.
ï¶ UBL Fund Managers Ltd.
UBL Fund Managers is a wholly owned subsidiary of United Bank Limited, making it the first Asset
Management Company launched by a Pakistani bank. UBL Fund Managers have been in operation since
2001 and are ranked among the leading asset management companies in Pakistan.
12. Islamic Mutual fund industry
Islamic mutual funds operate similarly to traditional mutual funds, with the
exception that they only invest in Shariah-compliant assets. Shariah-compliant
investments follow to Islamic principles, meaning they are free of interest and
financial penalties.
Shariah-compliant investments
The term "Shariah compliant Fund" refers to a group of money in which
investors combine their funds for the goal of making halal earnings in strict
accordance with Shariah rules or Islamic principles.
14. Challenges Faced By Islamic Funds
ï¶ Fund size is small.
ï¶ Lack in strong legal and institutional framework.
ï¶ Lack in supervisory framework.
ï¶ Lack of knowledge and understanding of the Islamic
Fund.
ï¶ Lack in research and development in the field of
Islamic finance and economics.
ï¶ Lack in HR development and training to the banks
staff on Islamic Banking system.
15. Funds being Operated in the Market
ï¶ UBL Sharia stock fund
ï¶ United Islamic income fund
ï¶ HBL Islamic money market fund
ï¶ HBL Islamic stock fund
ï¶ Al- Meezan Mutual fund Ltd.
ï¶ Askari Islamic asset allocation fund
19. Marketing Of Mutual Funds
Advertising through print media
ï¶ Magazines
ï¶ Newspapers
Advertising through electronic media
ï¶ Television
ï¶ Radio
Outdoor advertising
ï¶ Hoardings
ï¶ Banners
20. Incorporation of an NBFC and Grant of License as
an Asset Management Company
NOC for Formation of NBFC
Application to Specialized Companies Division, SECP
Headquarter Islamabad for obtaining permission to
form an NBFC along with the following documents:
ï¶ Form I of the Rules along with all relevant supporting
documents
ï¶Fee with Form I (as per Schedule II of the Regulations)
21. Licensing as AMC
Application to Specialized Companies Division, SECP
Headquarter Islamabad for grant of license for to carry
out Asset Management Services
ï¶Form II of the Rules along with all relevant supporting
documents
ï¶ Fee with Form II (as per Schedule II of the
Regulations)
22. Fund Documentation and Mechanics
ï¶ Trust Deed
ï¶ Offering Document
ï¶ Account Statement
ï¶ Electronic Issuance and Certificates
23. How to buy and redeem units in mutual funds
Investment by Individuals
ï¶ Copy of CNIC
ï¶ Application / Account Opening Form /Purchase of Units
Form
ï¶ Zakat Affidavit (Optional)
ï¶ KYC Form (Know Your Customer)
ï¶ FATCA (Foreign Account Tax Compliance Act.) Form
ï¶Cheque /pay order/demand draft payable to the respective
trustee
ï¶ Carefully complete all forms, and read all documents
before you sign them.
24. Investment by Corporate
ï¶ Memorandum and Article of Association/ Trust deed
ï¶ Board / Trustee Resolution approving the investment
ï¶ Application/Account Opening Form
ï¶Purchase of Units Form
ï¶ Power of Attorney and/or relevant resolution of board of
directors/ trustee delegating authority to any of its officer
to invest
ï¶ NTN of the institution with tax status
ï¶ CNIC of the officer to whom the authority has been
delegated
25. Redemption procedure
A unit holder may redeem units by lodging a request, on
the prescribed form (redemption form), with an
authorized branch of a distribution company.
Redemption payments are made to the investors within a
maximum period of 6 working days, either through a
cross cheque or through a bank transfer by submitting
the redemption form at designated sales points of an
AMC.
