asset management industry sector presentation

Asset Management Industry Sector Presentation

Apr 2014

Global Industry Overview Regional Industry Domestic Industry

Back to the BasicsAsset Management Company (AMC)

A company that invests its clients' pooled fund into securities mainly through mutual funds that match its declared financial objectives.

Mutual Fund

An investment vehicle made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets.

Assets under Management (AUMs)

The market value of assets that an AMC manages on behalf of investors.

Net Assets Value (NAV)

A closed-end mutual fund's price per share or open-end fund's per-share value.

Return

Change in the fund’s NAV over time.

Overview Regional Industry Global Industry Domestic Industry

Types of Mutual Funds in PakistanSr. Fund Category Investment Avenue Minimum Rating

1 Equity Scheme Minimum 70% allocation in equities Not Applicable

2 Balanced Scheme 30%-70% assets invested in equities A-

3 Asset Allocation SchemeAs per the Offering Document of the Fund

Not Applicable

4 Fund of Funds Scheme Invest in net assets of other schemes Not Applicable

5 Islamic Schemes For all respective fund categories A-

6 Capital Protected FundAs per the Offering Document of the Fund

Not Applicable

7 Index Tracker SchemeAtleast 85% of net assets in the index selected

Not Applicable

8 Money Market SchemeMoney market government securities and placements

AA

9 Income Scheme

Corporate Debt instruments, government securities and placements with 25% allocation in Cash & TDRs

Not below investment grade

10 Aggressive Income Scheme

Corporate Debt instruments, government securities and placements with 10% allocation in Cash & TDRs

Not Applicable

11 Commodities Atleast 70% of net assets in the commodities/commodities future

Not Applicable


Rating ServicesAsset Manager Grading

Mutual Fund Performance Ranking – Star Ranking

Fund Stability Rating

Capital Protection Rating


Sr. Asset Manager Country CY12 CY13 Growth1 BlackRock U.S. 3.8 4.3 14.0%2 Vanguard Group U.S. 2.2 2.9 31.8%3 Allianz Group Germany 2.4 2.4 0.0%4 State Street Global U.S. 2.1 2.3 10.2%5 Fidelity Investments U.S. 1.9 1.9 2.9%6 Bank of New York Mellon U.S. 1.4 1.6 15.5%7 AXA Group France 1.5 1.5 4.4%8 J.P. Morgan Chase U.S. 1.4 1.5 4.8%9 BNP Paribas France 1.3 1.2 -7.3%10 Deutsche Bank Germany 1.2 1.2 -3.8%

Total 19.3 21.0 8.9%Top10 / Global AUMs 31%

USD Trillion

Top10 Asset Managers


Region Country Index ReturnAmericas USA Standard & Poor's 500 40.5%Americas USA Dow Jones Industrial Average 37.2%Americas USA NASDAQ 100 46.4%Americas Brazil Sao Paulo SE Bovespa Index -20.4%

Europe Luxembourg LuxX Index 16.3%Europe France CAC 40 33.3%Europe Germany DAX Index 41.7%

Asia Australia S&P/ASX 200 14.9%Asia Japan Nikkei 225 40.0%Asia China CSI 300 3.1%Asia India BSE Sensex 30 5.2%Asia India National Stock Exchange CNX Nifty Index 6.2%Asia Pakistan KSE 100 49.4%

Africa South Africa FTSE/JSE Africa All Share Index 17.5%

Top Indexes | Performance | CY13


Chocolate Slide

Funds categories in Pakistan :

Largest AMC in world and its AUMs :

Second Largest AMC and its AUMs :

AUM to GDP ratio of the world :

Number of mutual funds :

Global AUMs :

Highest Performing Index in the presentation and its return:

Category having highest AUMs :

Overview Global Industry Regional Industry Domestic Industry

Indian Rupee 'mlnInvestor Sep-12 Mar-13 Sep-13 Sep-12 Mar-13 Sep-13Banks/FIs 200,312 105,256 74,185 52,340 338 45,379 Corporates 1,220,466 749,867 1,045,462 1,899,555 49,675 2,390,575 FIIs 9,308 6,407 10,697 22,730 312 7,503 High Networth Individuals 57,282 57,522 141,365 1,299,904 26,093 1,513,373 Retail 12,214 12,680 23,698 251,731 4,324 289,008 Total 1,499,581 931,731 1,295,407 3,526,259 80,742 4,245,837

Indian Rupee 'mlnInvestor Sep-12 Mar-13 Sep-13 Sep-12 Mar-13 Sep-13Banks/FIs 20,590 17,443 13,172 1,030 45,716 660 Corporates 176,069 156,641 147,847 87,915 2,292,267 81,589 FIIs 13,242 28,113 25,826 1,872 16,964 651 High Networth Individuals 361,581 337,366 349,712 100,975 1,515,153 86,861 Retail 1,301,535 1,186,955 1,087,934 134,612 415,849 124,191 Total 1,873,016 1,726,518 1,624,491 326,405 4,285,948 293,952

Indian Rupee 'mlnInvestor Sep-12 Mar-13 Sep-13Banks/FIs 274,272 168,753 133,395 Corporates 3,384,006 3,248,449 3,665,473 FIIs 47,152 51,796 44,678 High Networth Individuals 1,819,742 1,936,133 2,091,311 Retail 1,700,091 1,619,808 1,524,830 Total 7,225,261 7,024,939 7,459,687

Money Market Income

Equity Others

Total

Investors’ Mix – Indian Mutual Fund Industry


Total Mkt.sh Total Mkt.sh Total Mkt.sh Total Mkt.sh Total Mkt.sh

HDFC Mutual Fund 1,013,925 12.89% 1,017,203 12.46% 1,049,768 12.40% 1,030,463 12.75% 1,089,901 12.43%

Reliance Mutual Fund 906,358 11.52% 945,802 11.58% 977,714 11.55% 932,493 11.54% 1,024,872 11.69%

ICICI Prudential Mutual Fund 813,942 10.35% 878,351 10.76% 916,949 10.83% 851,743 10.54% 971,909 11.09%

Birla Sun Life Mutual Fund 768,898 9.78% 770,464 9.43% 797,608 9.42% 772,562 9.56% 849,983 9.70%

UTI Mutual Fund 706,381 8.98% 694,504 8.50% 747,067 8.82% 700,570 8.67% 743,512 8.48%

SBI Mutual Fund 533,113 6.78% 549,054 6.72% 591,632 6.99% 587,059 7.26% 645,607 7.37%

Franklin Templeton Mutual Fund 408,686 5.20% 415,643 5.09% 417,220 4.93% 436,882 5.40% 442,576 5.05%

IDFC Mutual Fund 300,019 3.81% 328,860 4.03% 389,376 4.60% 395,354 4.89% 412,477 4.71%

Kotak Mahindra Mutual Fund 317,728 4.04% 353,614 4.33% 372,030 4.39% 348,063 4.31% 357,578 4.08%

DSP BlackRock Mutual Fund 308,376 3.92% 323,423 3.96% 330,412 3.90% 304,857 3.77% 326,415 3.72%

Others 1,788,010 22.73% 1,889,654 23.14% 1,876,991 22.17% 1,722,906 21.32% 1,900,626 21.68%

Total (INR mln) 7,865,436 8,166,572 8,466,766 8,082,953 8,765,456

Dec-13AMC

Dec-12 Mar-13 Jun-13 Sep-13

Top10 AMCs – Indian Mutual Fund Industry


Top10 Funds – Indian Mutual Fund Industry

Sr. Fund Total Return1 ICICI Pru Exp&Other Services 46.1%2 Franklin Smaller Cos 34.8%3 Axis Long Term Equity Fund 34.6%4 Mirae Emerging Bluechip Fund 32.9%5 ICICI Pru Dynamic Plan 28.0%6 Tata Ethical Fund 24.1%7 Birla Sun Life Top 100 23.5%8 UTI MNC Fund 23.5%9 ICICI Pru Top 100 Fund 23.4%

10 Birla Sun Life MNC Fund 23.3%


Market Share | AMCs – Pakistan Mutual Fund Industry

Total Mkt.sh Total Mkt.sh Total Mkt.sh Total Mkt.sh Total Mkt.shMeezan AM2 JCR-VIS 41,011 11.3% 42,309 11.4% 46,077 11.9% 46,639 12.2% 48,020 11.6% 17.1%NAFA AM2 PACRA 48,891 13.5% 50,629 13.6% 45,155 11.7% 43,911 11.5% 41,805 10.1% -14.5%MCB-AH AM2 PACRA 35,786 9.9% 36,673 9.9% 36,167 9.4% 35,993 9.4% 39,080 9.5% 9.2%UBL AM2 JCR-VIS 33,870 9.3% 35,288 9.5% 33,893 8.8% 32,249 8.4% 36,219 8.8% 6.9%Allied AM2 JCR-VIS 16,656 4.6% 20,678 5.6% 21,231 5.5% 22,687 5.9% 25,269 6.1% 51.7%NIT AM2- PACRA 76,504 21.1% 73,526 19.8% 81,018 21.0% 76,899 20.1% 86,620 21.0% 13.2%PICIC AM2- JCR-VIS 15,985 4.4% 16,918 4.6% 20,487 5.3% 18,586 4.9% 22,688 5.5% 41.9%HBL AM2- JCR-VIS 14,845 4.1% 13,102 3.5% 13,070 3.4% 18,917 4.9% 21,524 5.2% 45.0%JS AM2- JCR-VIS 12,249 3.4% 8,871 2.4% 9,546 2.5% 11,877 3.1% 12,703 3.1% 3.7%Atlas AM2- PACRA 8,526 2.4% 16,743 4.5% 17,475 4.5% 11,162 2.9% 12,666 3.1% 48.6%Askari AM3+ PACRA 9,458 2.6% 8,567 2.3% 10,231 2.7% 10,060 2.6% 10,187 2.5% 7.7%Lakson AM3+ PACRA 12,175 3.4% 12,268 3.3% 13,267 3.4% 10,578 2.8% 10,147 2.5% -16.7%Faysal AM3+ JCR-VIS 6,135 1.7% 6,638 1.8% 5,335 1.4% 7,181 1.9% 8,236 2.0% 34.2%BMA AM3+ PACRA 1,233 0.34% 1,043 0.3% 1,028 0.3% 1,132 0.3% 1,266 0.31% 2.68%Primus AM3 PACRA 3,086 0.9% 3,723 1.0% 7,008 1.8% 8,321 2.2% 9,218 2.2% 198.7%Habib AM3 PACRA 4,619 1.3% 3,885 1.1% 3,708 1.0% 5,230 1.4% 6,086 1.5% 31.8%Alfalah (incl IGI) AM3 PACRA 10,219 2.8% 9,997 2.7% 10,092 2.6% 10,233 2.7% 9,839 2.4% -3.7%KASB AM3 JCR-VIS 2,733 0.8% 2,666 0.7% 2,611 0.7% 2,580 0.7% 2,890 0.7% 5.7%AKD AM3- JCR-VIS 2,642 0.7% 2,709 0.7% 3,608 0.9% 3,710 1.0% 4,037 1.0% 52.8%Pak Oman AM3- JCR-VIS 2,010 0.6% 1,884 0.5% 1,972 0.5% 1,839 0.5% 1,787 0.4% -11.1%National AM3- JCR-VIS 914 0.3% 832 0.2% 1068 0.3% 931 0.2% 1049 0.3% 14.8%Safeway AM4+ JCR-VIS 1,707 0.5% 1,881 0.5% 2,339 0.6% 2,128 0.6% 1,691 0.4% -0.9%First Cap AM4+ PACRA 289 0.08% 301 0.1% 333 0.1% 271 0.1% 274 0.07% -5.19%Dawood --- --- 1,068 0.3% 0 0.0% 0 0.0% 0 0.0% 0 0.0% -100.0%Total (PKR mln) 362,611 371,131 386,719 383,114 413,301 14.0%

GrowthAMC Rating RaterDec-13Dec-12 Sep-13Jun-13Mar-13


Sr.# Fund Total Return1 Golden Arrow Selected Stocks Fund 75.7%2 JS Large Cap Fund 64.6%3 National Investment Trust 64.4%4 JS Growth Fund 64.2%5 Safeway Mutual Fund 63.4%6 Asian Stocks Fund 61.8%7 AKD Opportunity Fund 61.6%8 Crosby Dragon Fund 53.7%9 PICIC Stock Fund 51.4%

10 PICIC Investment Fund 51.3%

Top10 Funds – Pakistan Mutual Fund Industry


Chocolate SlideSize of Indian mutual fund industry :Banking Deposit in India :India’s largest AMC :AUM base of Pakistan :Number of mutual funds in Pakistan:Category having highest AUMs :Largest AMC :Top performing fund of Pakistan :

Tax Structure

Minimum Equity Requirement

Regulatory Environment

Clientele Cash Dividend Capital Gains (<12M) Capital Gains(>12M)

Banks 25% 35% 10%

Corporate/NBFI 10% 10% 0%

Retail 10% 10% 0%


Form of BusinessMinimum equity requirement for fresh license Timeline

Jun-10 Jun-11 Jun-12Asset Management Services PKR200mln PKR100mln PKR150mln PKR200mlnInvestment Advisory Services PKR30mln PKR30mln PKR30mln PKR30mln


Launch of Commodity Funds

Outsourcing of back-office operations approved by the SECP

Increased focus on Investment Advisory through SMAs

Launch of Capital Preservation funds based on CPPI methodology

Key Developments


Removal of Tax Arbitrage

Retention of quality human resource

Limited financial capability to invest in operating platform

Attractive rates of national savings schemes

Risks & Opportunities

Continuous support from regulator

Increase retail investor awareness

Enhanced focus on investment advisory to tap HNW

Innovation in product development

Thank You

asset management industry sector presentation

Documents

number of mutual funds

mutual funds price

types of mutual funds

openend funds

funds nav

pool of funds

performing fund of pakistan

clients pooled fund