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Mutual funds are an investment that allows a group of investors to pool their money and hire a portfolio manager. The manager invests this money (the fund s assets) in stocks, bonds or other investment securities (or a combination of stocks, bonds and securities). The fund manager then continues to buy and sell stocks and securities according to the style dictated by the fund s prospectus. With the launch of National Investment (Unit) Trust (NIT) in 1962 an open-end mutual fund established in the public sector, Pakistan became the first country to have a mutual fund in South Asia Region. Thereafter, Investment Corporation of Pakistan (ICP) was established in 1966, that too in the public sector, to float and manage closed-end mutual funds. It launched 26 mutual funds in total, all of which have now been privatized. The private sector remained shy from entering into this arena for a very long time. Encouraged by the upsurge in the stock market and following the notification of asset management companies rules by the regulator, the private sector entered for the first time in midnineties. However, it could not make any appreciable progress in the initial phase. Besides other challenges, the long and deep recession in the country during the period from 1996-2000 further aggravated the operating environment. The industry got a boost from 2002 onwards and registered substantial growth, with assets under management rising from PKR 25bln at end-Jun02 to over PKR 350bln at present. There is also an increasing trend of new funds being floated (total 134 at end-Nov 09). Currently there are Seventy-five open-end fund(excluding Islamic funds),Nineteen open-end Islamic funds, Nineteen close-end funds and twenty-one Pension funds, as by Nov 09.There are 9 categories in open-end funds, 5 categories in Islamic open-end funds, 7 in close-end funds and 2 categories in Pension funds. The present study attempts to evaluate the management effectiveness of both open-ended and close-ended mutual funds in Pakistan for the purpose of benefiting the fund managers and the small investors.
which shows the NNA in relation of the previous AUM balance (annualized). Assets Under Management are an indicator of any asset manager's underlying earnings capability.7 6.5 4.Market Analysis Variables and methodology: Management effectiveness would be evaluated by examining the Net annual returns(between types of funds). Total Net Assets(between categories) and several descriptive statistics for AMC s under different types of funds. Results: Assets Under Management Performance: AUM is a term used by brokerages.1 5. Sources of Data: The annual sample data is collected for all open-ended and close-ended funds listed on Mufap (the official website of mutual funds association of Pakistan).8 4. insurance companies and other companies that manage or invest money as a measure of success and comparison against their competitors. Furthermore. it's common to calculate the key figure 'NNA growth'.Net Annual returns are calculated by dividing the net income of fund by the the Net asset value. NNA growth can also be eferred to as organic growth.3 10. Spread sheet computer software is used for the required calculation. mutual fund companies.7 18 21.6 10. which indicate how much money from clients had been newly invested.1 National Fullerton Asset Management Ltd MCB Asset Management Ltd Arif Habib Investment Management Ltd Al Meezan Investment Management Ltd PICIC Asset Management Ltd JS Investments UBL Fund Managers 3.4 12.8 . AUM-AMC-wise Contribution (1Q09) National Investment Trust Ltd 2. Investors are mainly interested in the NNA (Net New Assets).
AUM-Cateogry wise contribution (1Q09) Islamic Income and Money market 49% 8% Other 3% Balanced and Asset Allocation 5% Equity 35% .
78 234777.311 UBL Fund Managers 27.81 543.1% 12.54 4702.8% 4.7% 4.879 National Fullerton Asset Management ltd 27.99 69312.45 572.687 MCB Asset Management Ltd 17.49 216980.7% 82% .652 Arif Habib Investment Management Ltd 15.77 8548.3 TOP TEN AMCs(AMU-wise) AMC 1Q09 National Investment Trust Ltd 56.146 Al Meezan Investment Management Ltd 12.1% 10.Appendix Open End funds Fund type Asset Allocation Balanced Bond Capital Protected Equity Fund of Funds Income Index Tracker Money market Islamic Asset Allocation Islamic Balanced Islamic capital protected Islamic Equity Islamic income Open End GrandTotal AUM 2377.4% 10.111 KASB Funds Ltd 10.223 Askari Investment Management Ltd 7.3% 6.05 17796.8% 2.66 405.834 PICIC Asset Management Ltd 12.04 996.25 5230.16 73084.6% 5.023 Top ten Total 219.13 369.222 Market share 21.5 2094.5% 3.787 JS Investments 32.653 Industry Total 269.