KARACHI: The size of the mutual funds industry stood at Rs482 billion on March 31, 2015, down by Rs15bn, or 3 per cent, from Rs497bn the earlier month.

The amount was spread over three categories: Open-end mutual funds that claim the biggest share of the pie amounting to Rs454bn; closed-end mutual funds at Rs17bn and pension funds at Rs11bn. All that money is held by 22 asset management companies in as many as 216 mutual funds. But for all that, the billions under management by the mutual fund industry happen to be just 5.6pc of the total bank deposits.

“The mutual fund industry has yet to catch up with the current trend and shed the old habit of deposits with banks that fetch pittance in returns or keeping cash at home, even if the returns are none,” says Ahmed Bilal, who manages a medium-sized open-end fund.

He pointed out that in comparison to Pakistan, the size of the Indian mutual fund industry stands at Rs12 trillion with every fourth household feeling safe to entrust their savings to the funds.

Among the major players in the mutual funds sector, National Investment Trust (NIT) continues to lead the pack with Rs79bn under management. It is closely followed by Al Meezan Investment Management Limited with Rs68bn; UBL Fund Managers Rs57bn; NBP Fullerton Asset Management Rs55bn; MCB-Arif Habib Savings and Investment with Rs48bn.

In the open-end fund category, money market funds have under their belt Rs104bn and income funds Rs110bn, which outpaces the equity market funds with Rs97bn in that high-risk category. Islamic equity funds stood at Rs35bn; Islamic income funds Rs31 and Islamic funds at Rs22bn on March 31, a report by brokerage firm Spectrum Securities (Pvt) Limited shows.

For investors short of time, required skills and knowledge about the investment avenues, mainly the stock market, experts and fund managers have continued to suggest taking entry through the mutual funds that are managed by professionals armed with necessary knowledge and expertise.

“There have been some big inflows after small investors burnt their fingers in the equity market meltdown in Feb-March this year,” says a fund manager who tracks both the stock and the money markets.

The recent steps taken by the regulators in extending strict regulations in the conduct of affairs of the mutual fund industry also has all the trappings of giving the industry a big push forward.

Published in Dawn, April 19th, 2015

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