KARACHI, April 10: The Federal Minister for Finance, Shaukat Aziz, has said that the mutual fund industry has finally started to develop to a reasonable level but there still is a long way to go.

He was speaking at a presentation at National Investment Trust (NIT) offices on Saturday. He said that the "NIT management had set a trend for fund managers and corporate sector by pursuing prudent policies, sense of responsibility and by taking timely decisions", a press statement released by NIT said.

The minister observed that the mutual fund industry played a vital role in the operations of the stock markets as well as for the small investors and thus contributed significantly towards the development of the economy of a country.

He said that a developed mutual fund industry had a marked significance for pension funds, provident funds and other such schemes of employee's terminal benefits.

He said mutual funds also played an important role for small investors who do not possess the necessary skill to operate directly in the market and all those investors could benefit from economies of scale, as well as expertise available in the shape of experienced fund managers.

The minister stated that NIT's performance of the recent past had alleviated problems previously faced by investors in NIT units and investors in general, had benefited. "Gains realized and handsome dividend inflows to such investors have also given support to the stock market", Mr Aziz was quoted to have said.

Earlier, briefing the finance minister about NIT's performance, its chairman Tariq Iqbal Khan said that the trust had taken a lead in following best industry practices and principles of good governance and thus achieved higher profit for its investors.

"Due to enhanced profitability, NIT was in a position to enhance the yield to its investors when in general yield on financial instruments was declining", said the NIT chairman.

He informed that due to its substantial holdings, NIT presently had representation on the board of directors of 180 listed companies.

He said that due to overall improvement and major reforms introduced in NIT, its profit had increased from Rs931 million to Rs3,578 million in the last five years.