I am Ihsanullah mansoor from Afghanistan currently enrolled student of the University of Haripur,Haripur,KPK,Pakistan at the department of management sciences.

1. .
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2. introduction
• Ihsanullah (4320)
• Ajab Khan (4318)
• K.Obaidullah (4317)
• Samiullah (4319)
• Zainullah (4321)

3. Mutual Funds

4. FOLLOWING ARE THE CONTENTS OF MY
PRESENTATION
 Introduction & Concept of Mutual funds.
 Working of Mutual funds.
 History & Phases of Mutual funds.
 Structure & Flow of Mutual funds.
 Types of Mutual Funds.
 Mutual Fund Performance.

5. Mutual fund
and its Concept

6. An old Axiom :
“It is not wise to put all eggs into
one basket”
……… was probably in the minds of
those who formed the first mutual fund.
Why did Mutual Funds come into existence?

7. Mutual Funds
• A Mutual Fund is a trust that pools together
the savings of a number of investors who
share a common financial goal.
• The money thus collected is then invested
in capital market instruments such as
shares, debentures and other securities.

8. Mutual Funds
Mutual Funds
Professional
Fund
Managers
•MBA’s
•CA’s
The Investor
Investments
•Stocks
• Money Markets
•Bank Deposits

9. Characteristics of Mutual funds:
• An outstanding long term return for the past 5, 10, and
20 years.
• Low Expenses.
• Diversification
• No Loads.
• Long Term Records.
• High ethical standards and reputation.

10. History of Mutual Funds
 The first mutual fund was established in Europe.
 First mutual fund outside the Netherlands was the Foreign &
Colonial Government Trust, which was established in London in
1868.
 Mutual funds were introduced into the United States in the 1890s.
They became popular during the 1920s.

11.  In 1893, the first closed-end fund “The Boston Personal
Property Trust” was formed.
 In Pakistan National Investment Trust (NIT) offered first
open end fund in 1962.
 ICP offered a series of closed end funds in 1966, these were
later privatized in 2000.
History of Mutual Funds

12. Pool their
money with
INVESTORS
FUND
MANAGERS
Passed
back to
Generate
SECURITIES
Invest in
RETURNS
How Mutual Fund works?

13. Flow of Mutual Funds

14. Investors
Fund
Securities
Return
Given back to
That generates Which is invested in
Pool their money in
Mutual Funds Operations

15. PERFORMANCE OF MUTUAL FUND
COMPANIES OF PAKISTAN

16. STRUCTURE BACKGROUND
 Open end and closed end funds are established through a trust deed as a
trust under the trust act 1888.
 Investment Company is established as a limited liability company.
 Operated by two parties i.e. fund manager and the trustee or custodian.
 Central Depository Company (CDC) largest trustee of mutual funds in
Pakistan with almost 90% of the market share.
 Securities and Exchange Commission of Pakistan (SECP) through Non-
bank financial companies (NBFCs) Regulations 2008 regulates the mutual
fund industry.

17. Mutual fund
Types

18. TYPES OF MUTUAL FUNDS ON THE
BASES OF STRUCTURE
 Open ended Funds.
 Closed ended Funds.

19.  Open End:-
Continuously offer and redeem their units to the investors.
 Closed End:-
One time issuance of certificates and then are traded in the
secondary market.
 Investment Company:-
One time issuance of shares and then are traded in the
secondary market.
TYPES OF MUTUAL FUNDS ON THE
BASES OF STRUCTURE

20.  A type of mutual fund, where there are no restrictions on the
amount of shares the fund will issue.
 If demand is high enough, the fund will continue to issue shares
no matter how many investors there are.
 Open-end funds also buy back shares when investors wish to sell.
 It's important to understand that each mutual fund has different
risks and rewards.
Open ended Funds

21.  In general, the higher the potential return, the higher the risk of
loss.
 Although some funds are less risky than others, all funds have
some level of risk - it's never possible to diversify away all the
risk. This is a fact for all investments.
Open ended Funds

22.  Closed End Funds have a predetermined and fixed number of
shares outstanding.
 Closed-end funds behave more like stocks because they trade on
an exchange and the price is determined by market demand after
an initial public offering (IPO) process.
 Closed-end funds can be traded below their net asset value or
above.
Close ended Funds

23.  The closed-end fund "company" still has its own stock, which is
traded on an exchange and trades above or below its underlying
value, or net asset value (NAV), in this case.
 They also trade according to market demands. Every seller must
have a buyer.
Close ended Funds

24.  Primary Markets are the markets in which
corporations raise new capital. When securities are
sold for the first time directly from the issuer it is a
transaction in the primary market.
Primary Markets

25. Total Industry Size - Rs. 171 billion
(US$ 2.83 billion)
Total number of Funds - 56
Total number of Mutual Funds - 30
Open end Rs. 129.73 bn
Closed end Rs. 41.33 bn
Open end 34
Closed end 22
Public Sector 1
Private Sector 29
Mutual Funds Industry in 2006

26. Benefits OF Mutual Funds
 Professional Management:-
Expertise to manage and reinvest interest or dividend
income, or to investigate thousands of securities. Access to
extensive research, market information, and skilled securities
traders.
 Liquidity:-
Mutual fund can be bought and sold on any business day, so
investors have easy access to their money.

27. Benefits OF Mutual Funds
 Diversification:-
 Securities from hundreds or even thousands of issuers it reduces
the risk of loss.
 Convenience:-
 Mutual funds offer services that make investing easier. Mail,
telephone, or the Internet. Automatic investments into a fund or
automatic transfers from a fund to your bank account.

28.  MARKET RISK: Sometimes prices and yields of all securities rise and fall.
 Inflation Risk: Inflation is the loss of purchasing power over time.
 POLITICAL/GOVERNMENT POLICY RISK: Changes in government policy and
political decision can change the investment environment.
 LIQUIDITY RISK: Liquidity risk arises when it becomes difficult to sell the
securities that one has purchased.
RISK FACTORS OF MUTUAL FUNDS

29. 25 28 30 35 40 50 60
Start
Career
Marriage
Buy
Automobile
Buy
House
Children’s
Education
Daughter’s
Marriage
Retirement
AGE
Why Invest?

31. Mutual fund
in Pakistan

32.  Controlled by Public Sector, initially.
 Lack of awareness.
 Interest rates were too high.
 Education.
 Distribution.
 Low savings.
Why Mutual Funds are not
developed in Pakistan?

33.  The National Investment (Unit) Trust is Pakistan’s largest and
oldest Mutual Fund. As on June 30, 2009, NIUT had funds under
management of around Rs. 28 billion invested in over 430 listed
companies and had approximately 56,000 unit holders
 Mutual Funds were introduced in Pakistan in 1962, with the public
offering of National Investment (Unit) Trust (NIT) which is an
open-end mutual fund in the public sector. This was followed by the
establishment of the Investment Corporation of Pakistan (ICP) in
1966, which offered a series of closed-end mutual funds
Mutual Funds Industry in Pakistan

34. Continue…
• Currently there exists one open end (NIT)
mutual fund in public sector. Twelve open-ended
and fourteen closed-ended mutual funds under
private sector management, and there are many
more Funds in the pipeline

35. by:GurmeetSingh
 NATIONAL INVESTMENT TRUST
 NBP FULLERTON ASSET MANAGEMENT LIMITED
 ABAMCO LIMITED
 AL FALAH GHP INVESTMENT MANAGEMENT
 AL-MEEZAN INVESTMENT MANAGEMENT LIMITED
.
Mutual Funds Corporation in Pakistan

36.  ARIF HABIB INVESTMENT MANAGEMENT LTD.
 ASIAN CAPITAL MANAGEMENT (PVT.) LTD
 ASKARI ASSET MANAGEMENT LTD.
by:GurmeetSingh
Mutual Funds Corporation in Pakistan

37. Mutual fund
Examples in Pakistan

38. by: Gurmeet Singh
 Meezan Islamic Fund (MIF) is not only the largest Shariah compliant equity
fund but also the largest Equity Fund in private sector in Pakistan.
 MIF invests in combination of income and growth stocks of Shariah compliant
companies with demonstrated track record of profitability and stable dividend
payout history.
Meezan Islamic Fund

39.  Risk Diversification:-
MIF reduce the risk of volatility of prices by investing your money in a well
defined portfolio of securities.
 Cost Efficiencies:-
The per unit research and execution costs of a fund manager are also lower
due to the large size of portfolio under management.
Salient Features Of MIF

40.  Professional Management:-
Our fund managers are trained investment professionals. Their knowledge
provides you and opportunity to earn greater risk adjusted returns. Also by
investing in MIF, you pass on the job of continuous monitoring and
evaluation of investment opportunities to the Fund manager.
 Healthy Return:-
Apart from tax benefit, MIF also provides you a healthy return on your
investment.
Salient Features Of MIF

41.  Tax Credit:-
Investment in MIF enables you to get tax benefit up to Rs. 232,500/- in case of
salaried person or up to Rs 272,250/- on investments up to Rs. 1,000,000.
 Affordability:-
A minimum investment of Rs. 5,000 makes MIF an affordable investment for
small investors. Subsequent investments can be made with a minimum amount
of Rs. 1,000. There is no cap on maximum amount of investment
Salient Features Of MIF

42. Fund Statistics:
Fund Type Equity
Launch Date 8-Aug-03
Trustee Central Depository Company
Benchmark KMI-30 Index
Auditors KPMG Taseer Hadi & Co.
Management Fee 2 %
Front End Load 2%
Listing KSE
Status of Funds

43. Description
30 June
2005
30 June
2006
30 June
2007
30 June
2008
30 June
2009
30 June
2010
30 June
2011
Dividend Per
Unit Rs.
7.50 17.50 17.50 15.60 10.00 - 9.00 10.00
% of Face
Value(i.e., Rs.
50/ Unit)
15.00
%
35.00
%
35.00
%
31.20
%
20.00
%
-
18.00
%
20.00
%
% of Opening
NAV
15.00
%
32.15
%
29.81
%
26.61
%
16.70
%
-
25.51
%
26.90
%
Dividend History