Asset Management Companies (AMCs) in Pakistan continued to attract inflows of funds from individual investors and corporations, which surged to over Rs. 2 trillion for the first time in Pakistan.
According to the Mutual Fund Association of Pakistan (MUFAP), asset management companies through various funds of different categories receive high-value investments and savings from the investors.
The overall value of funds surged to Rs. 2.025 trillion by the end of November 2023 as compared to Rs. 1.355 trillion reported till last year’s November, showing a historically high increase of Rs. 67 billion merely in a year. The mutual funds of different AMCs offer lucrative returns of around 20 percent, which is historically high levels due to higher interest rates.
The funds traded in the equity market even offered up to 25 percent in the last few weeks, which attracted short-term investments from investors in recent weeks.
The mutual funds are divided into three main types including open-ended funds with a total value of Rs. 1.966 trillion, voluntary pension funds with a total value of Rs. 58 billion, and exchange-traded funds with a total value of Rs. 358 million.
Among these open-ended funds, funds traded in the money market have a 51 percent share with values surging to over Rs. 1 trillion. Income funds of various AMCs also attracted over Rs. 585 billion with a 30 percent share till November 2023.
Funds traded in the equity market stood at Rs. 168 trillion with 9 percent share, and other multiple funds attracted over Rs. 206 billion in investments with a 10 percent share. Al Meezan Investment Management Limited is the leading AMC with funds worth Rs. 386 billion. NBP Fund Management Limited is managing funds of over Rs. 255 billion. HBL Asset Management Limited stood at number three with an asset value of Rs. 194 billion.
MCB Investment Management Limited secured the fourth position with assets values of Rs. 168.9 billion. These leading AMCs are also listed on the Pakistan Stock Exchange (PSX).
The digital account opening facility for local investors and overseas through RDA also attracted a number of investors besides the temptation of lucrative returns on the investment of mutual funds. From January to November 2023, the investment through digital accounts surged from Rs 1.3 billion to Rs. 5 billion within the country.
Investment through RDA also surged from Rs. 1.8 billion to Rs. 3.4 billion. The size of the asset management sector has witnessed tremendous growth during 2023 in terms of values.
It equally benefits fund managers through profitability and investors through returns. Besides, the government is also generating revenues on account of withholding tax and CGT. The previous coalition government also abolished the incentive tax rebate of up to 20 percent on the investment of mutual funds last year.
