Message from Chairman MUFAP

It is indeed a gratifying moment for me as Chairman of Mutual Funds Association of Pakistan - MUFAP that MUFAP is today holding yet another performance Excellence Award ceremony for the second consecutive year to acknowledge and celebrate par excellence performance achieved during the fiscal year ended June 2004 by some of its member funds through good governance, professionalism, transparency and quality management.
On this occasion, MUFAP is taking pride in honouring the five best funds of the country namely Pakistan Stock Market Fund, Pakistan Income Fund, National Investment Trust, PICIC Growth Fund and Safeway Mutual Fund for their excellent performance in different sub sectors of mutual funds industry during the financial year 2004.
As we know that Pakistan's mutual funds industry has shown remarkable growth not only in its size but also in product diversification and market penetration during the last few years. The industry has shown growth both for open end funds as well as for closed end funds. It is now offering more products, derived from variable income and fixed income securities.
Therefore, it became essential to have more award categories for a more realistic and comparative performance. Since industry is growing both in its depth and diversification, the challenge for fund managers to compete is becoming more tougher every year. I take this opportunity to extend my heartiest congratulations to the leadership and the entire management of these award winning funds. More than MUFAP, the investors of these funds must be happy today on their choice.
This event has utmost significance from MUFAP's point of view in the sense that it helps MUFAP play its due and contributory role in creating general awareness among masses about mutual fund sector with the national goal of enhancement of saving and investment potential in the country. MUFAP under its investor awareness program, has recently finalised a plan to launch "talk shows" on mutual funds industry on electronic media. Besides this awareness program, MUFAP is also committed to create employment's to dynamic and properly qualified youths and thus to encourage discipline in financial planning career for various financial products.
Today, the size of the industry is around Rs 112.200 billion, which in the year 2002 was Rs 23.000 billion only. The size of mutual funds industry in Pakistan, as percentage of bank deposits and as percentage of GDP is much lower than the comparative figures in the region. This simply demonstrates that the industry still has tremendous potential to grow, if it targets to achieve a size comparable in the region.
Again the industry needs more products to suit investors risks and return profile, their cash flow needs etc. the mutual funds industry in Pakistan is proactively working to develop products like Pension Funds, Real Estate Funds, Infrastructure Funds, Sector Specific Funds and Fund of Funds etc. It is very gratifying to note the progress, Pakistan's capital market has been making in terms of its automation, transparency, volume and risk management. The stock market had seen a turmoil in the recent past, where index slipped in a very short span from 10,500 to 7,500 level.
As was reported in the press, the small investors were worst hit in this crisis. However, if the small investors would have been in the stock market through the galaxy of mutual funds, they would have managed their risk far better and in a professional manner. The message is that mutual funds are the best of route for investing in the stock market, in a long term portfolio horizon, more so for small investors.
Another important development that needs to be highlighted here is that MUFAP is actively pursuing its affiliation with the global market of mutual funds and is now receiving global recognition. It is matter of great pride and satisfaction that due to healthy and active representation from the platform of MUFAP, Pakistan has been accepted to host 12th Asia Oceania Regional meeting of the funds in 2007 under the auspicious of International Investment Funds Association (IIFA). The IIFA is the association of investment funds from around 30 countries around the globe.