Presentation mutual funds

Topic: Mutual Funds

RIZWAN AHMAD

CMA-Stage 4

e-mail : [email protected] of Cost and Management Accountants of Pakistan

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Outline of Presentation

Mutual Funds

Portfolio/Fund Manager Net Asset Value Types of Mutual Funds

By Structure

By Investment Objective Sources of Profit generation Mutual Funds industry in Pakistan Rules Govern Mutual Funds in Pakistan Mutual Funds Companies in Pakistan NBP Fullerton Asset Management Limited

Sponsors

Funds name

NAFA Money Market Fund

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Mutual Funds……….?

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What is a Mutual Fund ?

It is a trust that pools the savings of a number of investors who share a common financial goal

Professional fund managers then invest these funds in a way that helps investors achieve their goal

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A mutual fund is managed by a management company (Asset Management Company)

The management company is a bank of human resources, considered to be professionally qualified personnel

The portfolio of mutual fund is managed by a "Portfolio Manager", whose responsibility is to be invested in, and satisfies the desire of the investors

Every day, the fund manager/ portfolio manager counts up the value of all fund's holding, figures out how many shares have been purchased by shareholders, and then calculates the Net Asset Value (NAV) of the mutual fund, the price of a single share of the fund on that day.

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Mutual Funds

Pool their money with

INVESTORS

FUND MANAGERS

Passed back to

Generate

RETURNS

SECURITIES

Invest in

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NAV (Net Asset Value)

A fund's NAV fluctuates along with the value of its underlying investments. The formula for NAV is:

NAV = (Market Value of All Securities Held by Fund + Cash and Equivalent Holdings - Fund Liabilities) /

Total Fund Shares Outstanding

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Example

Let's assume at the close of trading yesterday that a particular mutual fund held $10,500,000 worth of securities, $2,000,000 of cash, and $500,000 of liabilities. If the fund had 1,000,000 shares outstanding, then yesterday's NAV would be:

NAV = ($10,500,000 + $2,000,000 - $500,000) / 1,000,000 = $12.00

A fund's NAV will change daily as the value of a fund's securities, cash held, liabilities, and the number of shares outstanding fluctuates

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Types of Mutual Funds

By structure, there are two types of mutual funds, which are:

Open-end mutual funds

Closed-end mutual funds

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Open-Ended Funds

Unlimited Capitalization No predetermined date of redemption Sales and purchase of units at current net

asset value (NAV)No restrictions on entry & exit Purchase of units directly from funds Sale of units directly to the funds

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Closed-Ended Funds

Constant Capitalization

Pre-determined date of redemption

Purchase & sale of units at the stock exchanges

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Types of Mutual Funds (By Investment Objective)

By Investment objective there are two types of mutual funds, which are:

GROWTH FUNDS

INCOME FUNDS

BALANCED FUNDS

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SOURCES OF PROFIT GENERATION

A mutual fund can generate profits from two different sources, which are:

Dividend

Capital Gains

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Mutual Fund Industry in Pakistan

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 subsequently offered a series of closed-end mutual funds

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

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Rules Govern Mutual Funds in Pakistan

There are two rules govern mutual funds in

Pakistan, which are:

1. Investment Companies and Investment Advisors' Rules, 1971. (Govern closed-end mutual funds)

2. Asset Management Companies Rules, 1995. (Govern open-ended mutual funds)

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Mutual Fund (Asset Management) Companies in Pakistan

NATIONAL INVESTMENT TRUST

NBP FULLERTON ASSET MANAGEMENT LIMITED

ABAMCO LIMITED

AKD INVESTMENT MANAGEMENT LTD.

AL FALAH GHP INVESTMENT MANAGEMENT

AL-MEEZAN INVESTMENT MANAGEMENT LIMITED

AMZ ASSET MANAGEMENT LTD.

ARIF HABIB INVESTMENT MANAGEMENT LTD.

ASIAN CAPITAL MANAGEMENT (PVT.) LTD

ASKARI ASSET MANAGEMENT LTD.

ATLAS ASSET MANAGEMENT LTD.

BMA ASSET MANAGEMENT LTD.

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HABIB ASSETS MANAGEMENT LTD.

HBL ASSET MANAGEMENT LTD

KASB FUND LIMITED

NATIONAL ASSET MANAGEMENT COMPANY LIMITED

NATIONAL FULLERTON ASSET MANAGEMENT LIMITED - NAFA

NATIONAL IINVESTMENT TRUST LTD.

NBP CAPITAL LIMITED

NOMAN ABID INVESTMENT MANAGEMENT LIMITED

PICIC ASSET MANAGEMENT COMPANY LTD.

PRUDENTIAL FUND MANAGEMENT LTD

SAFEWAY MANAGEMENT LTD.

UBL FUND MANAGERS LTD.

WE INVESTMENT MANAGEMENT LIMITED

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CROSBY ASSET MANAGEMENT LTD.

DAWOOD CAPITAL MANAGEMENT LTD.

FAYSAL ASSET MANAGEMENT LIMITED

FIRST CAPITAL INVESTMENTS LTD

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NBP Fullerton Asset Management LimitedA subsidiary of

National Bank of Pakistan

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NBP Fullerton Asset Management Limited

Sponsors :

National Bank of Pakistan

Fullerton Fund Management

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Summary

Mutual Funds

Portfolio/Fund Manager Net Asset Value Types of Mutual Funds

By Structure

By Investment Objective Sources of Profit generation Mutual Funds industry in Pakistan Rules Govern Mutual Funds in Pakistan Mutual Funds Companies in Pakistan NBP Fullerton Asset Management Limited

Sponsors

Funds name

NAFA Money Market Fund

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Quote for future leaders

" If you do not like any Rule , just Follow it , Reach the top and Change the rule ........

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Presentation mutual funds

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