The mutual funds industry performed very well and witnessed a growth of some 88 percent during the calendar year 2007, attaining the size of Rs 330 billion from Rs 175 billion in December 2006.
In an exclusive interview with Business Recorder, Muhammad Ali, chief executive officer of UBL Fund Managers Limited, said that growth in the mutual funds industry was continuing to rise and was likely to touch the mark of Rs 400 billion by the end of December 2008.
Muhammad Ali is a prominent banker. He did MSc in Finance from the University of Strathclyde in Glasgow, Scotland, funded by British Council Scholarship. He is MBA of the Institute of Business Administration (IBA) Karachi with Gold Medal for overall First position in 1988-89 and holds CFA charter.
He have 15 years experience in fund management and investment banking with institutions like Asian Development Bank, United Bank Limited, ANZ Grindlays Bank and Pakistan Kuwait Investment Company.
In fund management industry he has credit of setting up of UBLFM in 2001-02 and launch of UMF. He also managed equity portfolio of UBL (Rs 3 bn) and Pak Kuwait (for a brief period), while turnaround initiated at UBLFM resulting in enhanced market image.
He said that presently some 35 mutual fund companies are working in Pakistan, out of which National Investment Corporation is leading with around 30 percent share. However in the private sector, UBL is the second largest fund manager with a share of 10 percent share.
The industry is rapidly expanding. However, it faces some serious issues including unavailability of human resource and lack of investors' awareness, he said, and added that to meet this challenge some steps had been taken by industry stakeholders for continuous supply of trained manpower.
Ali said that despite the fact that the industry is growing very well, it is still in initial stage and would be mature in the next two or three years.
He said that Pakistan's mutual funds industry's size is not enough "if we compare with our neighbour country, whose mutual funds industry size stands at five trillion Indian rupees.
"The industry has planned some special program for training of new human resource, and we are expecting that this would help further extend the industry," he said.
About UBL fund, he said that presently the UBL Fund Managers is managing some Rs 33 billion worth of funds, which have grow by some 266 percent during the calendar year 2007 and would reach Rs 50 billion by December 2008.
"The funds of UBL stood at Rs 9 billion at the end of the 2006 as compared to Rs 33 billion as of January 31, 2008 all in open-end category, out of which some Rs 3.5 billion has been received under the Islamic fund", he said.
He said that UBL Fund Managers Ltd is a wholly owned subsidiary of United Bank Limited making it the first Asset Management Company to be launched by a bank in Pakistan.
"We have been awarded Management Quality Rating of 'AM2' by JCR-VIS Credit Rating Agency, which has been upgraded by two notches from 'AM3' signifying a strong team of qualified personnel and the management's initiatives to streamline operations,'' he said.
Huge flows of funds have made UBL FML the largest private asset management company (AMC) with respect to assets under management (AUM) in open-end mutual funds, he said.
He said: "Performance and achievements in the past year are an indication of our determination to become the leading asset management firm in the country."
Ali said that UBL Fund Managers collaborates closely with UBL in providing high quality investment services on countrywide basis through its wide network providing existing and prospective customers easy access, through a toll free 24x7 call centre and investment information through 'short messaging service' (SMS).
"We offered tax-free returns, no corporate or withholding tax, as per existing laws, and tax rebate on investment of up to Rs 300,000 for individuals'', he said.
Low minimum investment amount Rs 5,000 is required to open account and Rs 1,000 for subsequent investments with an encashment period of 3 to 5 days depending on the type of fund, he said.
He said that systematic investment plan is available which will allow employees to invest on monthly basis through standing instructions to HR or through direct debit if he or she has a UBL account.
"We also offer free investment advisory services for individuals for developing portfolios suitable to their risk tolerance and return requirements," he said.
He said that presently UBL Fund Managers is managing six funds, including United Money Market Fund (UMF), United Growth & Income Fund (UGIF), United Composite Islamic Fund (UCIF), United Stock Advantage Fund (USF), United Islamic Income Fund (UIIF) and recently launched UBL Capital Protected Fund-I (UCPF-I).
UBL funds during the last year, he said, had performed well and distributed some 10.26 percent pa return on the UMF; 11.51 percent pa on UGIF, 29.7 percent on USF and 14.9 percent on UCIF.
"We launched operation in 2002 and have some 6,000 investors in the growing industry of Pakistan, which have overall some 0.2 million investors.
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