KARACHI, Oct 11: The mutual fund industry in Pakistan has taken off at a dramatically rapid pace and the growth potential is enormous.

Those were the consensus views of a host of fund managers gathered on Monday at the signing of an agreement between Flow (Pvt) Limited - the first private sector marketing arm of all major mutual funds in Pakistan - and the United Asset Management Company (a subsidiary of United Bank Limited).

The agreement empowered Flow (Pvt) Ltd to act as the Investment Facilitator & Distributor Agent for the United Asset Management Company's mutual fund(s) - United Money-Market Fund (UMMF).

UMMF was the latest addition to the list of Funds whose sale would be promoted by Flow, said Mr Saeed Ahmed Naseem, Managing Director of Flow, who observed that in a short span of time such agreements had been concluded with almost all leading Asset Management Companies. Those included Arif Habib, Jahangir Siddiqui's ABAMCO, Dawood's PVCL, Crosby Dragon of Hong Kong and also the government-sponsored NIT.

The company was also said to be under similar business arrangements for sale of Meezan Islamic Fund and the Atlas funds. The MD, Flow, stated that the company provided one-stop shop facility for avenues of investment in different types of Mutual funds in line with clients' demands.

Javed Hasan, chief executive of United Asset Management Company said that mutual funds were likely to become a major part of financial industry and that various funds were competing and cooperating in a healthy environment to give best returns to their investors.

The MD of Flow stated that the growth of mutual fund industry in Pakistan was faster than anticipated, due to injection of new equity and the re-direction of Provident Funds and gratuity funds from banks and NSS to the higher yielding mutual funds.

Ali Siddiqui, director Jahangir Siddiqui & Co, which is the parent company of ABAMCO- the largest private sector fund in Pakistan - agreed that the mutual fund industry had witnessed tremendous growth in the recent years and ABAMCO had grown almost 10 times in two years.

He observed that as time goes by, fund management companies should focus increasingly on asset management and they should use third party distributor as much as possible, to sell funds.

Mr Saeed Ahmed Naseem, MD of Flow concluded that in the near future investments in Mutual funds and Unit Trusts were expected to grow even further because the ratio of funds sitting idle in Banks to the funds invested in Mutual Funds was abysmally low in comparison with economically advanced nations.

As an example, investment in Mutual Funds in Pakistan was still less than 10 per cent of the bank deposits, compared to an estimated 106 per cent of total bank deposits in the US, which was an indication of still untapped potential of industry in Pakistan.