mutual fund - burhan khan.ppt
TRANSCRIPT
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Mutual Funds
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WHAT IS MUTUAL FUNDS?
A mutual fund is just the connecting bridge or afinancial intermediary that allows a group of
investors to pool their money together with a
predetermined investment objective.Three benefits of investors
Small investors
Diversification
Professional management
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Types of Mutual Funds
Open Ended
Closed Ended
Open-end Mutual Fund
Open ended fund is a fund which issues or
redeems its units at net asset value (NAV).
It dose not have a fixed fund size.
Investors can get back their investment at any
time by selling the units back to the fund.
These are no fixed number of units.
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Close-end Mutual Fund
Close end fund is a fund whose certificates aretraded at market prices other than the NAV.
Compulsory listed .
Investors can sell their certificates to any buyerthrough an exchange where the certificate is
listed other then the issuing company.
These are fixed number of certificates.
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BACKGROUND OF MUTUAL FUND The first mutual funds were established in Europe.
One researcher credits a Dutch merchant with
creating the first mutual fund in 1774.
Mutual funds were introduced into the United
States in the 1890s.
The first open-end mutual fund with redeemableshares was established on March 21, 1924.
Fund industry growth continued into the 1980s
and 1990s.
At the end of 2010, there were 7,581 mutual funds
in the United States with combined assets of $11.8
trillion.
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Back Ground of Mutual Fund
Industry in Pakistan
Realizing the importance of mutual fundindustry, the Government of Pakistan (G0P)
set up National Investment Trust Limited
(NITL) in 1962 to manage an open-end
mutual fund.
In 1966, G0P set up another institution -
Investment Corporation of Pakistan (ICP) .
In 1971, G0P allowed private sector closed-
end funds to enter the industry.
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the period 1991 onwards that the private sector
closed end funds were launched.
Golden Arrow was the first closed end fund to beestablished in the private sector in 1983.
Asset Management Companies Rules, 1995 to
provide the necessary legal framework for
launching and managing open-end funds by the
private sector.
1994-95 - More funds launched in private sector .
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incentive to setup open-end mutual funds and a
record 15 new listings came out in 2002.
2006 - Total number of AMCs are 30 managing 56
mutual funds .
2011- Total number of AMCs are 22 managing
managing 128 open end funds and 14 close endfunds.(source MUFAP).
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S.no Manager Assets under management
1 National Investment Trust 41,554,31616.82
2 Al Meezan Investment Management 30,065,88912.17
3 MCB Fund Managers 28,997,33611.73
4 UBL Fund Managers 28,762,31011.64
5 ABL Fund Managers 19,052,040 7.71
6 NBP Fullerton Asset Management 16,414,9166.64
7 JS management 11,965,0324.84
8 HBL Fund Managers 9,647,6653.9
9 Askari Asset Management 8,358,8983.38
10 Faysal Asset Management 6,383,7532.58
174,142,854 70.5
Top ten open-end fund Asset Management Companies, September 2011
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PRODUCTS AND PORTFOLIOS OF Mutual Funds
Stock Fund / Equity Fund / Capital Market Fund
80% in equity.
20% bank deposit.
Fixed Income Fund / Money Market Fund
Above 60% in bonds
25% T.bills
15% banks deposit not more than this.
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Islamic Fund
80 % on Government of Pakistan sukkuk.
20% bank deposit in islamic banks.
Hedge Funds(not present in pakistan)
Hybrid Funds
Its a balance fund invest in capital market and
money markets and remaining in bank deposit.
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SECP
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AMC
Manage mutual funds
Discretionary portfolio. Wealth management.
Investors/unit holders
Make investment They invest after reviewing Offering documents.
Trustee Payment & Receipt under observation of trustee.
Registrar Official keeper of record.
Units sale ,redemption , unit holder , dividend distributor.
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Custodian / Depository
to hold in safekeeping assets (CDC)
Other Key words Net Asset Value
Sale
Sale price Redemption
Redemption price
Management Fee
Sale load/Front End Load
Back end load
Front end load
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THANK YOU
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Questions/AnswerSession