Mutual funds

I have carefully read both articles which appeared in your reputable newspaper on the above subject written by Khalil Ahmed captioned "A case for changes in Mutual fund sector" and Faria Saad with the heading "Happy ending of Mutual Funds."
The article written by Khalil Ahmed tried to explain the actual problems of this sector.
The investors were unaware of the facts mentioned in this article. He very rightly drew attention of the readers as well as the regulators to the difficulties being faced by the small investors that have suffered heavily due to the manipulation of the stock market by the mutual fund industry.
He very rightly pointed out that the mutual fund sector has invested almost 40% of their net assets in "carryover transactions" (COT) and that is illegal and contrary to the interest of small investors as these funds are frequently being used to manipulate the stock market and for some investors this activity is contrary to their belief as it constitutes an element of interest.
This should have been declared by the mutual fund industry prior to carrying on this activity to the Unit Holders and that has not been done.
We were also surprised to read that while SECP is trying to eliminate COT business and replacing it with margin financing, how SECP has allowed this activity.
It amounts to loss of faith and trust. He also mentioned that the management companies of these mutual funds have been charging a management fee for this type of activity.
The mutual fund sector is meant to encourage small investors rather than wipe them out from the capital market.
During the collapse of equity market since the new Prime Minister took over, this sector has been the biggest seller that drove the prices down and most of the small investors were wiped out from the market and paid their losses through selling of their household effects, jewellery and in certain cases their house to meet the losses.
Had that been not done, they would have participated in the current stock market rally that pushed the index almost over 300 points.
The article written by Faria Saad "happy ending of mutual funds" does not respond to any of the questions raised in the previous article written by Khalil Ahmed.
The latest article seems to be an attempt to divert the attention of the regulators and small investors to the successes of the mutual fund sector.
If we carefully look at the results of all the listed mutual funds described by Faria Saad, the conclusions drawn by the earlier article of Khalil Ahmed that these mutual funds have failed to pay cash dividends to the shareholders are correct.
Despite the fact that there were profits earned the distribution was made by announcing bonus share/right shares or both. In a very few instances, a small portion of cash was distributed.
We would welcome some comments on the questions raised in the article written by Khalil Ahmed.