SCOPE AND PERFORMANCE

OF MUTUAL FUNDS
INDUSTRY IN PAKISTAN,
2008-2016
Presented by:
Muhammad Bilal Shahid
Numaria Naseem
Remshaw Hameed Butt
Sana Irfan
Zainab Ayyaz
 INTRODUCTION
 Pools of money invested in a mutual fund managed by a fund manager.

 Invested in stocks, bonds and money market instruments, a diversified portfolio.

 The unit price is measured by the Net Asset Value.

 HBL, MCB, UBL, ABL, Alfalah, Dawood and Atlas are companies with A or
AA+ ratings.
 Monitored by the SECP, transparency showcased through the MUFAP.

 Types of Mutual Funds:

 Closed ended: floated in the market
 Open ended: traded within the Asset Management Company
 INTRODUCTION
Categories of Mutual Funds: Risks:

 Equity Fund  Market risk

 Income Fund  Interest risk
 Money Market Fund  Liquidity risk
 Asset Allocation Fund  Credit risk
 Capital Protected Fund  Government regulation risk
 Index Tracker Fund
 Fund of Funds Fund
 Shariah Compliant Fund
 LITERATURE REVIEW
 Trends between 2006 to 2010 had been volatile – (Mahmud and
Mirza, 2011)
 Islamic funds performed best according to all numerical calculation
formulas – (Mahmud and Mirza, 2011)
 Mutual funds react positively with market’s performance – (MUFAP)
 Mutual funds depend on ethical corporate governance and role of
regulator – (Saeed, 2004)
 Scope of Mutual funds depend on management fee and economic
conditions within the country – (Nasir and Musarat, 2010)
DATA ANALYSIS
 AVERAGE ANNUAL NET
ASSETS OF THE INDUSTRY
NET ASSETS
1400000
1200000
1000000
800000
600000
400000
200000
0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
CREDIT RATING PROFILE
 Only applicable to debt funds
 Pakistan Cash Management fund, AAA, open end fund,
 Government securities, mostly of treasury bills.
 Overall maturity- 90 days, to keep the interest rate low
 NAFA, AAA,
 High liquidity
 Owned by the government
 SHARPE RATIO
 The expected rate of return of a risky asset by calculating any
excess return obtained above the risk free rate for every unit of risk
incurred on the fund’s return.
SHARPE RATIO (2006-2010)
SHARPE RATIO (2013-2017)
 TREYNOR RATIO
 How much excess return has been achieved with one unit of
systematic risk,
 risk cannot be diversified
TREYNOR RATIO (2006-2010)
TREYNOR RATIO (2006-2010)
MARKET RETURN (2006-2011)
MARKET RETURN (2013-2017)
 RISK ASSOCIATED WITH
STANDARD DEVIATION
 Lower the risk, better the investment.
STANDARD DEVIATION (2013-
2017)
STANDARD DEVIATION (2013-
2017)
 CONCLUSION
 Mutual funds are gaining popularity
 What is currently happening?
 Transparency of information
 Efficient governance in the industry
 Increased awareness and education
 Online portal for investment
 Improved distribution system
 CONCLUSION
 Situation in 2017:
 Profitable equity funds of tobacco, automobile, cement and
petroleum sectors
 40 new open ended mutual funds introduced
 Shariah Compliant mutual funds saw 51% growth
 What about now?
 Vigorous fluctuations in stock market
 CPEC
 Rupee devaluation
 New tax laws – 5% tax on not paying dividends
 Steady growth trend over 56 years
 REFERENCES
 http://mufap.com.pk/pdf/WRMF.pdf
 https://www.almeezangroup.com/investor-education/mutual-funds-basics/
 https://tribune.com.pk/story/815482/twelve-equity-funds-beat-kse-100-index-in-2014/
 https://propakistani.pk/2018/01/12/growing-saving-investment-trend-expands-mutual-fund-sec
tor-pakistan/
 https://tribune.com.pk/story/1697190/2-pakistan-stock-exchange-wins-big-budget/