Mutual funds assets reach Rs273b

KARACHI - The net assets of the mutual funds have surged to Rs 273 billion during the first quarter of current financial year.
During Q1-FY09, the share of public sector investment in the mutual funds industry grew by 20.8 per cent while the private sector investment by its share size jumped by 79.2pc, respectively during the period under review.
As of end-December FY09, the growth in open-end funds was 87.4 per cent while the share of close-end funds was up by 12.6pc.
It is important to mention here that among 8 different categories of mutual funds, the volume of two major funds, equity and income rose by 34.4pc and 27.6pc, whereas, money market funds enlarged by 17.7pc.
It is worth noting here that the worst-ever global financial crisis accompanied with domestic liquidity pressures has badly affected the asset management industry of Pakistan. From the day the crisis broke out, the equity funds had not seen any subscription by the regulators. Around 50pc outflow of funds in categories, income and equity from mutual fund market has been reported, showing that the investment size of these funds will slump sharply in the emerging markets like ours.
Total Assets under Management (AUM) of Asset Management Companies (AMCs) of Pakistan registered a decline of 12.83pc in Oct on m-o-m basis. AUM of the industry amounted to Rs236.91b at the end of Oct compared to Rs271.77b at the end of Sept. Open end and closed end funds shared Rs206.09b and Rs30.81b respectively. Decrease in AUM of open-end funds was 13.38pc and for closed end funds, a decline of 8.97pc was witnessed in October 2008.
The mutual funds sector has grown rapidly in the last few years and accounted for the largest chunk of 55.3pc in total assets of the non-bank financial sector in FY08. Between FY02 to FY08, net assets of mutual funds have grown by more than 13 times to reach Rs. 330 billion by the close of FY08. The average payout of the mutual funds industry also grew to 18.0pc in FY08 (22.1pc in FY07).