The Mutual Fund industry in Pakistan has shown phenomenal growth in the past couple of years, increasing its assets under management from Rs. 18.95 billion in June 2001 to Rs. 100 billion in December 2004. Its been a success story based on conducive macro-economic climate, increased investor confidence in equity markets, ban on provident/pension funds from investing in National Savings Schemes (NSS), increased liquidity flows and a strong regulatory environment. With an increasing number of new entrants in the market, new funds with different risk and return structures continue to provide Pakistani investors with prudent and managed investment options.
From fixed income to pure equity funds, the market has indeed responded to the needs of the conventional investor.
In recent years we have also witnessed the rise of the Shariah conscious investor, and an attempt by many to gain market share in this emerging segment. Unfortunately, historically the Shariah conscious investor has been largely ignored by the conventional banking / financial institutions. However, that changed once credible financial institutions including Al Meezan Investment Management (AMIM) and Meezan Bank Limited (MBL) committed themselves to catering to the needs of the Shariah conscious investor.
The success of AMIM and MBL is due to superior performance, product innovation and a strong display of confidence by their clients. AMIM's story has been one of innovation to meet the needs of an investor class previously ignored, not only by product innovation alone but by prudent investment management practices designed to optimise results.
AMIM's main area of business is investment management; more specifically floating and managing both open end and closed end funds, and discretionary management of institutional portfolios. AMIM launched its first fund, a closed end fund, Al Meezan Mutual Fund ("AMMF") in 1996. AMMF has provided a cumulative return of 354% since inception in January 1996 till March 31st 2005 and has approximately Rs. 1.5 billion in assets under management as of April 21st, 2005.
AMIM launched its first open end fund, Meezan Islamic Fund ("MIF") in 2003, designed to enable unit holders to participate in a diversified portfolio of Shariah compliant securities. MIF has provided an impressive cumulative return of 76% since inception till March 31st, 2005 and has over Rs. 1.8 billion (as of March 31st, 2005) in assets under management.
In keeping with AMIM's strong commitment towards meeting the investment needs of the Shariah conscious investor, AMIM launched the first ever Shariah Compliant balanced fund in Pakistan in December 2004. Meezan Balanced Fund (MBF), a Rs. 1.2 billion closed end fund, has an investment objective "to generate long term capital appreciation as well as current income by creating a balanced portfolio that is invested both in high quality equity securities and Islamic Income Instruments."
MBF seeks to provide long-term growth in the value of investment, which provides consistency to the purchasing power of the investor, and aims to out-perform most other types of investment, as has been the case in the funds managed by AMIM. Meezan Balanced Fund (MBF) earned a total income of Rs. 161 million (for the period ended March 31st, 2005) and has over Rs. 1.3 billion in assets under management.
With approximately Rs. 5 billion in total assets under management, AMIM is one of the largest asset management companies in Pakistan and a true success story of prosperity achieved through Shariah Compliant investments.
(The writer is Assistant Vice President, Al Meezan Investment Management)
Comments
Comments are closed.