Final Presentation on Mutual Funds

8/10/2019 Final Presentation on Mutual Funds

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Types of Mutual Funds

1. Open Ended Mutual Funds

2. Closed Ended Mutual Funds


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OPEN ENDED CLOSED ENDED

BUYING /SELLING Through Asset

Management Company(AMC)

Through Stock Exchange

Size of capital No upper limit. Fixed number of shares.

Public Offering Continuous One time

Pricing Net Asset Value Determined by demandand supply

Charges Entry load/Exit load Brokerage charges


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How do Mutual Fundsdetermine their Unit Price? A fund's Net Asset Value (NAV) represents the price per unit.


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ADVANTAGES OF MUTUALFUNDS

DiversificationProfessional ManagementLiquidityConvenience

Ability to participate in investments thatmay be available only to larger investors


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2008

1962

Brief History of Mutual Funds in Pakistan

1962:The first open

ended m utual fundwas launched --

National Investment

1971: Govt. allowed private secotr closed

- ended funds

1995:Promulgation of

Asset Management

Companies Rules

1996: Formation of

MUFAP

1966:Establishment of

InvestmentCorporation OfPakistan (ICP)

1983: Gloden Arrow waslaunched. It was thefirst closed - endedfund established in

1996: ABAMCO Limited

was launched, thefirst private sectoropen ended funds

2002: Launch of UTP - Islamic Fund, thefirst Islamic open

1996: Launch of AMMF,

the first Islamicclose ended fund

2008: Establishment of

NBFC Regulations

2002:

Establishment of NBFC Rules


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CATEGORIES OF MUTUALFUND

Equity SchemeBalanced Scheme

Asset Allocation

Fund of Fund SchemeShariah Compliant (Islamic) SchemeCapital Protected SchemeIndex Tracker SchemeMoney Market SchemeIncome Scheme

Aggressive Fixed Income Scheme


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Performance of Mutual Fundsin Pakistan


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Reasons for slow growthNeglecting retail investorsLack of awareness

Absence of proper marketing

Poor law-and-order situation, terrorist activitiesand political instabilityLow savingsPoor government policies

Frauds in the pastHigh rates on alternative investments such asNSS


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Brief Historystarted in 1963 with the formation unit Trustof India, at the initiative of the Governmentof India.

In 1993 a new era of mutual funds startedwith the Private Sector funds, many foreignmutual funds started setting up in India

The biggest innovation was the launch

of open-ended funds.daily calculation of net asset value(NAV) were started


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Current Stategrowth rate of Indian mutual fund industry ismore than the global average.one of the fastest growing markets for mutual

funds. The future opportunity for Indianmutual fund industry is also very bright.

As companies, Mutual funds are providing

eye catching returns to the investor with abetter safe guard.


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ReasonsThe Indian mutual funds industry is witnessing arapid growth because of the following reasons.

infrastructural developmentincrease in personal financial assetsrise in foreign participation.growing risk appetite,rising incomeincreasing awarenessincreasing reach of Asset managementCompanies


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Rise of Indias open endedSchemes

The numbers of open-ended schemeshave been increased from the last fewyears except 2009

. According to AMFI (March 2011), therewere about 1095 schemes in India, out

of which 727 (66.39%) were open-ended.


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Points to Note

During these two decades, the totalassets managed by the industry hasgrown from two per cent to eight per

cent of the gross domestic product(GDP).

we find that in 1993, equity assets were1.2 per cent of the GDP, while now theyare 2.2 per cent.


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the retail investors should not just befrom the big cities but smaller ones aswell.

financial investments in general are onthe back foot compared to real estate or

gold.


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US mutual fund industry is the largestmutual fund industry in world it accountsfor about 49%

the total net assets of the U.S. mutualfund industry have grown from aboutUS$ 17 billions in 1960 to about US$10,000 billions in 2006


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Approximately every individual in US investin these funds.

Today, mutual funds assets in the UnitedStates are more than their bank deposits.

American investors increasingly haveturned to mutual funds to save forretirement and other financial goals.


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Total retirement Market in 2010

12.9 trillion Dollars

3.1 Trillion or 24% in Mutual Funds

9.8 Trillion or 70% managed by PensionFunds , Banks, Insurance companiesand Brokerage Firms


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Final Presentation on Mutual Funds

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Transcript of Final Presentation on Mutual Funds