Investment Avenue (Mutual Funds)

Considering the fact that Money market funds in particular are sovereign backed indicating that the principle amount of investment is secured by the government of Pakistan. Secondly Mutual funds are tax exempted in Pakistan.

Can anyone telme a better investment avenue than mutual funds specifically money/income market funds?

mutual funds are tax exempted upto a total investment of 2 lacs only.

Mutual funds / stock market etc are a thing of the past in Pakistan. Try NCEL, trade rice and gold.

[quote=", post:, topic:"]

Mutual funds / stock market etc are a thing of the past in Pakistan. Try NCEL, trade rice and gold.
[/quote]

any insight on rice trading?

trade rice :-/, i think nothing left for the our people to do except doing business in rice.. production is almost dead in country, people are just putting their money in trades.. which is causing inflation.

You do know that SECP has blocked all redemptions of mutual funds right now?

well Nauman, not all redemptions. Mutual Funds with direct exposure on equity securities have been blocked. That too goes in favor of MF holder.

Moreover, money/income market funds are still considered as safe and people/ investors are investing & Redeeming as per routine.

This may clear your views:

1. Is the current decision by the SECP to freeze all mutual funds? If not then which

funds have been frozen?

As per the SECP Circular sent on 7th October 2008, only funds with equity exposure

(equity funds, balanced funds, asset allocation funds etc.) have been frozen. This

means that no investment, redemption, transfer of units between funds etc can be

done during this period. At this point no redemption freeze has been announced for

money market or income funds.

2. Why has the decision to freeze all equity funds been taken by MUFAP and the

SECP?

This decision has a direct connection with the freeze on the stock market. As equity

funds are unable to raise cash in the case of redemptions by selling down their

portfolios, this decision has been taken to limit redemptions until three days after the

market freeze ends. Such redemptions requests are expected to put further pressure on

the equity market and hence the decision has been implemented.

3. Is the current decision by the SECP going to impact investment in money

market / income funds?

No. The decision taken by MUFAP and SECP does not affect income and money

market funds.

Open-ended Mutual Funds: SECP compels discounting of Income and Money Market Funds Friday, 07 November 2008

For snapshot of MF industry, visit

http://res.bmacapital.com/dailyreports/grapevine/pdfs/Grapevine51.pdf

sorry man i cannot help u in this matter......................

thanks

Well iam not asking for help flame. This thread is just for information and latest updates about the Mutual Fund Industry of Pakistan.

Thanks anyways :))

this is not the good time to invest in stock market mutual funds , money market fund cud pay better this year

thanks for reply man

join a new fourm www.aswik.com

Those of you planning an investment decision, consider investmenting in high rated commercial banks & Money Market Funds (Only those funds with no exposure on TFC's or CFS).

My family has invested in "AMZ income plus fund" and "MCB Dynamic Cash fund". After recent turmoil in the financial market we decided to liquidate our investment. Now our request for redemption has been lying pending with these two funds for the last one month and we have not yet received payment. To add insult to injury, these are being quoted at discount so for every 100,000/- we are going to get close to 92,000/-. We should have invested in NSS which is much more secured!!!

U r right Kool, these funds had exposure in TFC (Term Finance Certificates) and the TFC's sell at a discount prior to maturity. Even we shifted our clients from TFC heavy funds to those funds having no exposure in TFc's. Adding towards your redemption matter, AMZ has suspended its redemption (for 1 week) but MCB is doing redemptions as per routine.

Mutual Funds Industry in Pakistan is a false hope given to people to lure their hard-earned savings. I would like to point out to two basic flaws which mislead people and even though disclaimer is given with marketing material, it's not so simple for ordinary people (even some sophisticated investors) to understand the inherent problems underlying mutual funds, especially funds other than stock funds.

Firstly, there is no distinction between the short-term and long-term funds. Whereas, elsewhere in the world, financial markets are divided into capital markets and money markets (where capital markets represent usually long-term investments and money markets represent instruments having less than 1-year, i.e., short-term maturity). As a result, the money market funds would be able to liquidate in the short-run with no or little loss (because of current global financial crisis, this theory brakes down, but that is a different story). But here in Pakistan, that line between capital and money market blurs as long-term instruments like TFCs (having maturities no less than 5 years) comprise a big chunk of money market funds, including the cash funds, which are supposed to be highly liquid. But TFCs were never liquid enough to fetch prices close to par prior to their maturities. As a result, people suffered losses recently, when SECP forced asset management companies to mark down their TFC holdings.

Secondly, elsewhere in the world, securities in money market funds are marked to market on daily basis, as a result, the investors get to know the market situation pretty fast and can act accordingly. Here, TFCs are valued at cost, so even if no liquidity for TFCs was there in the market, they were still valued at 100. This sort of lulled investors to sleep as they were not aware of the actual worth of their investment which was eroding fast, and had to suffer huge losses all of a sudden. -ve 8% return on month-to-month basis is a HUGE loss; I wonder AM companies would be reporting these losses on annualized basis like they use to extrapolate positive monthly returns (which in itself is a wrong practice according to Global Investment Performance Standards).

So, bottomline: Yes, NSS should be the preferred vehicle for investment at the moment, as it apparently is risk free and offers handsome returns. I say 'apparently' because anything worst imaginable is possible under the leadership of Mr. 10%!

SIXTHSENSE October-November 2008: YOUR GUIDE TO INVESTING PROFITABLY

http://res.bmacapital.com/1/ResearchReportsFiles/AbridgedSixthSense%20Oct-Nov%2008%20FINAL.pdf

As per the SECP Circular sent on 7th October 2008, it is clear that only funds with equity exposure

(equity funds, balanced funds, asset allocation funds etc.) have been frozen. This

means that no investment, redemption, transfer of units between funds etc can be

done during this period. Apart from, but is this possible that transfer of units between the unit holders for some consideration in the same fund/single fund can be made in the abovesaid open-end mutual funds i.e, equity funds, balanced funds etc. ?

As per the SECP Circular sent on 7th October 2008, it is clear that only funds with equity exposure

(equity funds, balanced funds, asset allocation funds etc.) have been frozen. This

means that no investment, redemption, transfer of units between funds etc can be

done during this period. Apart from, but is this possible that transfer of units between the unit holders for some consideration in the same fund/single fund can be made in the abovesaid open-end mutual funds i.e, equity funds, balanced funds etc. ?

Can any one guide and oblige??