Substantial growth is witnessed in the investment in different mutual funds which resulted in an increase in the assets values of assets management companies to an all-time high level of Rs 1.2 trillion by the end of June 2022
The values of different fund managers surged by Rs 125 billion during the last six months against December’s values which stood at Rs 1.089 trillion, according to the recent data unveiled by the Mutual Funds Association of Pakistan (MUFAP).
The increase in investments and asset values was mainly the result of the high rate of return amid a low risk of losses.
The data further revealed that under the money market category, the mutual funds’ assets value posted a consistent increase to reach Rs 446 billion. This occurred due to the trend of investment that has increased in funds of the money market at a time when the policy rate has reached 15 percent.
Read more: Mutual fund assets soar 64.3% to cross Rs 1 trillion mark in FY21
Currently, the profit rate offered by funds managers on conventional and Islamic mutual funds ranges from 12 to 14 percent.
Not just the new investment has shown inflows in this area but investors are also shifting from uncertain trading sessions of the Pakistan Stock Exchange (PSX) to mutual funds to reserve fixed-rate or secure profit margins on their savings and investments.
Moreover, there are more than 275 funds of assets management companies comprising interest-based and Shariah-compliant. The areas of the funds include income, money market, equity, balanced, assets allocation, balanced, capital protected, fund of funds, commodities, etc.
Several asset management firms are subsidiaries of commercial banks or hold a significant shareholding of stock in banks and other financial organizations.
In addition, the investments in mutual funds are generally generated by individual investors, associations, the corporate sector, and institutions.
In the recent fiscal year, the government has stopped the incentive of tax credit for the investors of mutual funds against a certain amount. But, the investment in these funds continued because of the high-profit rates offered by asset management companies.
