Mutual funds are fast becoming the preferred vehicles of securities investments for the general public and corporates world-wide. Given the wide variety of structured products offered by the mutual fund industry, investors have numerous options to invest in products that best suit their risk/return profile.
Furthermore, lower transaction costs, diversification benefits, liquidity of open end funds and most importantly fund management expertise makes it stand out amongst other investment avenues. In Pakistan the concept of mutual funds as an investment class is gradually evolving. Overall Assets under management have increased 5 fold over the past 5 years. Number of open end schmes has remarkably grown from only 14 in 2004 to 123 as of February 2011. However, the size of Pakistan's mutual fund industry remains negligible at 1.6% of GDP as compared to around 50% globally.
Even though mutual funds form a small segment of the overall securities markets in Pakistan, they have grown phenomenally over the last few years. ABL Asset Management Company (ABL AMC), a wholly owned subsidiary of Allied Bank Limited, is the 6th largest fund management company in terms of AUMs in the open end category of the mutual funds industry. As of February 2011, total AUMs of ABL AMC stood at PKR15.11bn, growing by an impressive 45% Y/Y. This represents overall market share of 6.5% which the company has achieved in the short span of just three years. Our funds have been ranked consistently amongst the top performers in various investment categories. ABL Stock Fund was the best performing equity fund in 2010 with total return of 26.3% and has been granted the prestigious MFR 5-Star ranking by rating agencies.
ABL AMC is an active player in creating awareness and penetrating into the retail segment of the customer base. We boast a retail network of 45 branches and the funds are available through the entire 800 branch network of Allied Bank. A live TV show in of 11 episodes in collaboration with CNBC Pakistan, to create mass awareness and addressing investor concerns, along with regular organisation of road shows to penetrate in to the retail segment are some of the efforts undertaken to promote the mutual funds industry in Pakistan.
Apart from collective investment schemes, asset management companies are now actively offering advisory and portfolio management services for corporate and high net worth clients. Employee funds held with corporates can benefit significantly form these services in the form of tailored products, superior investment management, and expert advice offered by asset management companies. ABL AMC is actively involved in this offering this service as well and is managing employee funds for both local and foreign corporates in Pakistan.
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