Professional Documents
Culture Documents
Pakistan
Investors Education Seminar arranged by
SECP and ICAP held on 29th January 2015
Presented By First Capital Investments
Limited
Holding of units
Dividends
Custodian on behalf of
unit holders
Management Fee
Asset
Management
Company
Mutual Fund
Management Services
Trustee
Trustee fees
Ownership of assets
Net Income
Investments
Establishment Mechanism
Establishment Mechanism
Liquidity: Unit holders can convert their units into cash on any
working day. They will promptly receive the current value of their
investments. The fund buys back (redeems) the units.
Types of Fund
Open-end Mutual Funds
The Unit holders may buy or redeem the Units of the fund on a
continuous basis at the prevailing Net Asset Value (NAV). These
units are purchased and redeemed through Management
Company which announces offer and redemption prices daily
(working days).
Categories of Funds
Equity Scheme
An equity scheme or equity fund is a fund that invests in Equities more
commonly known as stocks/shares. The objective of an equity fund is
long-term growth through capital appreciation, (sources of revenue are
dividends and capital gains).
Balanced Scheme
These funds provide investors with a single mutual fund that invests in
both stocks and debt instruments and with this diversification aimed
at providing investors a balance of growth through investment in
stocks and debt instruments.
Categories of Funds
Fund of Fund Scheme
Fund of Funds are those funds, which invest in other mutual funds. These
funds operate a diverse portfolio of equity, balanced, fixed income and money
market funds (both open and closed ended).
Categories of Funds
Capital Protected Scheme
In this type of scheme, the payment of original
investment is guaranteed with any further capital gain
which may accrue at the end of the contractual term of the
Fund . Such funds are for a specific period.
Categories of Funds
Income Scheme
These funds focus on providing investors with a steady stream
of fixed income. They invest in short term and long term debt
instruments like TFCs, government securities like T-bills/ PIBs, or
preference shares.
as at 30 June 2014
Equity 94.7%
Income 5.3%
Pension Schemes
India
2047.81
180.088
8.79%
Pakistan
251.48
4.965
1.97%
Sri Lanka
71.57
0.948
1.32%
Bangladesh
186.59
0.644
0.35%
2005
Number of AMCs 16
Number of Funds
38
2006
20
48
2007
29
76
2008
26
97
2009
27
109
2010
28
135
2011
26
144
2012
27
159
2013
26
158
2014
21
170
60
40
20
0
2005
Open-end Funds
19
Closed-end Funds 19
Pension Funds
0
2006
29
19
0
2007
49
23
4
2008
67
23
7
2009
81
21
7
2010
105
21
9
2011
118
16
9
2012
133
15
11
2013
138
9
11
2014
153
4
13
2011
2012
2013
2014
Average
Equity
18.76%
25.04%
9.12%
56.42%
47.34%
31.34%
Index Tracker
29.79%
22.45%
7.33%
44.78%
35.37%
27.94%
Balanced
14.25%
16.38%
13.40%
36.65%
23.70%
20.88%
17.93%
12.19%
6.76%
23.42%
14.78%
15.02%
13.99%
31.70%
14.69%
35.93%
9.93%
21.25%
9.44%
11.02%
11.08%
9.73%
9.32%
10.12%
10.63%
11.85%
11.16%
9.05%
8.18%
10.17%
8.40%
-2.12%
1.45%
8.14%
5.88%
4.35%
7.22%
9.71%
3.27%
11.38%
0.00%
6.32%
-17.14%
0.00%
-8.57%
Asset
Allocation
Fund of
Funds
Income
Money
Market
Aggressive
Income
Capital
Protected
Commodity
2011
2012
2013
2014
Average
Islamic Equity
29.25%
37.23%
19.97%
47.94%
28.72%
32.62%
Islamic Balanced
16.82%
27.17%
16.24%
25.00%
28.25%
22.70%
-2.34%
49.64%
26.49%
24.60%
Islamic Index
Tracker
Islamic Asset
Allocation
Islamic Aggressive
Income
10.24%
13.82%
8.31%
30.80%
16.01%
15.84%
1.01%
1.35%
10.19%
7.81%
12.96%
6.66%
Islamic Income
8.07%
10.08%
10.98%
9.37%
8.74%
9.45%
10.10%
10.98%
10.69%
8.06%
8.70%
9.71%
6.26%
6.08%
6.17%
13.52%
10.45%
3.68%
11.17%
Islamic Money
Market
Islamic Fund of
Funds
Islamic Capital
Protected
14.07%
14.12%
Tax Credits
Unit Holders of mutual funds, other than an entity, shall be
entitled to a tax credit under Section 62 of the Income Tax
Ordinance 2001 on purchase of new Units. The amount on
which tax credit will be given shall be lower of:
(a) amount invested in purchase of new Units; or
(b) Twenty percent of the taxable income of the Unit Holder; or
(c) Rupees One Million (Rs 1,000,000);
KSE-100 (Rs.)
KSE-100
(US$)
MSCI Pakistan
(US$)
2004
39%
34%
9%
2005
54%
53%
56%
2006
5%
3%
-2%
2007
40%
38%
33%
2008
-58%
-67%
-75%
2009
60%
51%
78%
2010
28%
26%
19%
2011
-6%
-10%
-17%
2012
49%
38%
23%
2013
49%
38%
27%
2014
27%
33%
8%
Average
26%
22%
14%
Taxation
Tax issues:
Levy of Workers Welfare Fund (WWF) to Mutual Funds
despite these funds have no employees;
Sales Tax on Asset Management Services Provincial
Jurisdiction Conflicts;
Federal Excise Duty (FED) on Asset Management
Services, which amounts to double taxation;
Regulatory issues:
Unnecessary delays in granting various approvals to Asset
Management Companies and changes required on various
Laws like REIT Regulations.
Pakistan Equities look geared for another year of stellar returns with KSE-100
Index target of 40,000 points by December 2015 (an upside of 16.00% from the
existing level of 34,500 level), in view of the following factors:
The market continues to offer a dividend yield of 6%, the highest amongst the
regional markets. KSE-100 P/E of 8.9x at CY15 earnings is at around a 40%
discount of regional peers.
As return drops from debt based instruments, equity market will witness higher flows.
Despite of energy crises, the countrys growth trajectory moving towards 6.5% in view of the various
factors discussed in Equity and Debt Market outlook. (FY15 and FY16 GDP growth was estimated at 5.1%
and 6.0%, respectively)
Inflation CPI is expected to remain in the range of 4.5% - 5.5% during FY15 from earlier expected 8.00%.
Further monetary easing given lower CPI and widening real interest rate.
Disbursement of IMF tranche to unlock further flows from other multilateral agencies.
Current Account Deficit to GDP for the period ended Jul-Dec 2015 clocked in at 0.9% as against the
projected target of ranging 1-1.2% of GDP.
Privatization process to remain on track with focus shifting towards divestment of Governments stake in
loss making entities.
Government targeted fiscal deficit is 4.5% of GDP in FY 2015 as against 4.7% in FY 2014.
Political stability as all parties front a unified stand in the wake of recent terrorism.
Thanks