1. Marketing of Mutual Funds in Pakistan: Opportunities & ChallengesBy
Sohail Yaqoob

3. History of Mutual Funds in Pakistan
Government of Pakistan established NITL which launched first Open End Equity Fund in Pakistan – NIT
Government of Pakistan established ICP which launched series of Closed End Funds (25).
Only in the Mid 90s, the sprouts of mutual funds is witnessed
More funds launched in private sector
Total number of AMCs are 30 managing 56 mutual funds
Locally, we have witnessed the sprouts of mutual funds only in the mid 90s
Earlier, and for a long time, we had two funds, both in the public sector
-NIT, Open-End fund launched in 1962
-ICP, a series (25 nos.) of Close-End funds launched in 1966
More funds launched in private sector –
The growth spurned due to: economic revival, segregated divesture of ICP to private sector, and global trends
- The divesture of ICP funds in lots was a landmark strategy in the Mutual Funds industry of Pakistan

4. Mutual Funds Industry in 2006
Total Industry Size - Rs. 171 billion
(US$ 2.83 billion)
Total number of Funds - 56
Total number of AMC - 30
Open end
Rs bn
Closed end
Rs bn
Open end 34
Closed end 22
Locally, we have witnessed the sprouts of mutual funds only in the mid 90s
Earlier, and for a long time, we had two funds, both in the public sector
-NIT, Open-End fund launched in 1962
-ICP, a series (25 nos.) of Close-End funds launched in 1966
More funds launched in private sector –
The growth spurned due to: economic revival, segregated divesture of ICP to private sector, and global trends
- The divesture of ICP funds in lots was a landmark strategy in the Mutual Funds industry of Pakistan
Public Sector 1
Private Sector 29

5. Major Market Players National Investment Trust Ltd. JS ABAMCO Ltd.
Arif Habib Investment Management Ltd.
Al Meezan Investment management Ltd.
Atlas Asset Management Ltd.
UBL Fund Managers Ltd.
Locally, we have witnessed the sprouts of mutual funds only in the mid 90s
Earlier, and for a long time, we had two funds, both in the public sector
-NIT, Open-End fund launched in 1962
-ICP, a series (25 nos.) of Close-End funds launched in 1966
More funds launched in private sector –
The growth spurned due to: economic revival, segregated divesture of ICP to private sector, and global trends
- The divesture of ICP funds in lots was a landmark strategy in the Mutual Funds industry of Pakistan

6. Asset Management Companies in Pakistan

7. Mutual Funds in Pakistan

8. Year-wise Growth of Mutual Funds Since 2001

9. Total Mutual Funds Industry as % of GDP for the year 2005-2006
Source: State Bank of Pakistan

10. Mutual Funds Industry to Bank Deposits (September’ 2006)
Source: State Bank of Pakistan

11. Worldwide Mutual Fund Industry
History and Inception of Mutual Funds
First modern day mutual fund was opened in North America in 1924
The GREAT DEPRESSION of 1930s in USA has stalled the growth of mutual funds sector, like many other economic activities
Yet it was, 1990s that mutual funds became mainstream investments in the USA and around the globe
At the end of June 2006, total mutual fund assets all over the world were $ trillion

12. Worldwide Mutual Fund Industry

13. Asia/Pacific Mutual Fund Industry

14. Islamic Mutual Fund Industry
One of the fastest growing sectors BUT
As compare to over all mutual fund industry, it is at infancy
stage of growth and development
The wider acceptance of equity funds by Shariah Scholars in early 1990s paved the way to launch Islamic mutual funds.
Currently, approximately 250 Islamic Institutions in some 75 countries, managing funds worth over USD $200 billion.
The Islamic mutual funds market is one of the fastest growing sectors within the Islamic Financial System. Yet when compared to the mutual fund industry at large, Islamic mutual funds are still in their infancy stage of growth and development.
The wider acceptance of equity funds by Shariah Scholars in early 1990s paved the way to launch Islamic mutual funds.
Currently there are over 250 Islamic Institutions in some 75 countries that are managing funds worth over USD $200 billion

15. Comparison of Islamic vs World Wide
Mutual Fund Industry

16. Comparison of Pakistan’s vs. World Wide
Islamic Mutual Funds

17. Total Mutual Fund Industry in Pakistan - Rs. 171.00 bn
Size of Islamic Mutual Funds in Pakistan-Rs bn (5.33%)

18. Size of Islamic Mutual Fund in Pakistan - Rs. 9.114 bn
Market Share of Al Meezan Investments Rs bn

19. Total Mutual Fund Industry in Pakistan - Rs. 171 bn
Market Share of Al Meezan Investments Rs bn
as of September 30, 2006

20. Why Mutual Funds lagging in Pakistan?
Controlled by Public Sector, initially
Lack of awareness
Interest rates were too high
Education
Distribution
Low savings

21. How many people know? What is Mutual Fund?
What are different types of Mutual Funds?
Why an individual invest in Mutual Fund?
How can Mutual Funds be purchased?
A Mutual Fund is a single portfolio of investments managed by an investment management company on behalf of its many investors.
This allows each investor access to a professional managed pool of funds, actively managed by an Asset Management Company.
By investing in the stock market through mutual funds, investors overcome the shortcomings faced regarding inability to adequately diversify, manage and efficiently trade their portfolios.
A Mutual Fund is a pool of money in unit holders put their savings/ investments, which is managed by Professional Fund Managers (Asset Management Company) who invested it in different securities like shares, debt securities, money market securities etc. The pool is divided into units

22. What are the Advantages of investing in Mutual Funds?
Experienced and Professional Fund Management
Diversified portfolio
Economies of Scale
Liquidity
Convenient processing
Affordability
Transparency
Stringent regulator
Benefits of investing in a Mutual Fund.
Professional Fund Management- by making the strategy that best suits the investor’s objective
Diversification- portfolio of various stocks
Economies of Scale- in terms of research and execution costs
Liquidity – by selling & redeeming shares on an on-going basis in case of open end funds
Experienced and Professional Fund Management
Diversified portfolio
Economies of Scale
Liquidity
Convenient processing
Affordability
Transparency
Stringent regulator

23. What should be done to become a significant contributor in the global market?
(Opportunities)
Putting collective efforts at industry level
Comprehensive analysis of investors’ needs
and preferences
Education of People about mutual funds at mass level
Product innovations by launching specialized
products.
Widening, broadening and deepening the markets
Tapping overseas investor base
Team Work at Industry Level from MUFAP
For education at mass level to use Print and Electronic Media.
Banking and other related industries to utilize their network formutual fund platform
Performing in-depth market research to collect data on investors’ needs, preferences etc.
Analysis of the customer to provide customized and targeted solutions to customer needs Fgh
Cont…

24. What should be done to become a significant contributor in the global market?
(Opportunities)
Marketing in semi-urban and rural areas
Improving quality of service
Quick dissemination of information
Banking and other related industries to utilize their
network for mutual fund distribution
Expanding distribution network by discovering non-
non-traditional channel of distribution
Team Work at Industry Level from MUFAP
For education at mass level to use Print and Electronic Media.
Banking and other related industries to utilize their network formutual fund platform
Performing in-depth market research to collect data on investors’ needs, preferences etc.
Analysis of the customer to provide customized and targeted solutions to customer needs Fgh
Cont…

25. What should be done to become a significant contributor in the global market?
(Opportunities)
Understanding the importance of retail market
Separate funds for various investors’ segments.
Promoting standardize performance measurement
procedures at industry level
Creating positive image about the fund and changing
the nature of the market
Better technology aiming at providing quality service
Team Work at Industry Level from MUFAP
For education at mass level to use Print and Electronic Media.
Banking and other related industries to utilize their network formutual fund platform
Performing in-depth market research to collect data on investors’ needs, preferences etc.
Analysis of the customer to provide customized and targeted solutions to customer needs Fgh

26. How can Mutual Funds be marketed?
Advertisement through Print Media
Newspapers
Magazines
Advertisement through Electronic Media
Television
Radio
Outdoor Advertising
Hoardings
Banners
Cont…

27. How can Mutual Funds be marketed?
Direct Marketing
Personal Selling
Telemarketing
Direct Mail to existing as well as potential investors
Below the line activities (BTL)
Participation in exhibition
Information desk as public places
Arranging seminars - Corporate as well as Educational
Selling through Intermediaries/Distributors
Cont…

28. How can Mutual Funds be marketed?
Comprehensive website and link with other popular
websites
Providing quick response to the Customers through
Distribution Centers
Call Centers s
Providing up to the mark value addition services

29. What about the target market?
Individuals
Institution
Government Institutions
Private Organizations
Provident / Pension Funds
Trusts / Funds / Welfare Organizations
Educational Institutions
Overseas investors
Semi-urban and rural Segment
The mutual fund can be segmented into following main categories on the basis of their investment and return needs:
Retail Segment
Institutional Segment
Trusts
Overseas investors
Corporate Segment
Semi-urban and rural Segment

30. What would be the appropriate marketing strategy for each segment?
Individuals
Indirect selling through distributor network and regular
campaigns through print and electronic media, exhibition
Institutions
Personalized and direct marketing
Trusts / Funds / Welfare Organizations
Direct selling as well as indirect selling through distributor
network and creating awareness through appropriate media
Individuals
Indirect selling through distributor network and creating
awareness through appropriate media
Institutions
Personalized and direct marketing to sustain and increase
sales volumes
Trusts / Funds / Welfare Organizations
Cont…

31. What would be the appropriate marketing strategy for each segment?
Overseas investors
Personalized and direct marketing, prompt and timely service,
website links, advertisement in foreign print media, seminars /
conferences, road shows
Educational Institutes
Personalized and direct marketing
Semi-urban and rural Segment
Electronic media, simplified literature in rural languages, visits
by mobile vans with audio-visual aids, hoardings, wall
paintings and educational films
Overseas investors
Personalized and direct marketing with quick dissemination of information, coupled with prompt and timely service to sustain and increase sales volumes
Educational Institutes
Personalized and direct marketing to sustain and increase sales volumes
Semi-urban and rural Segment
This is the largest untapped market in Pakistan. Strategies to be emphasized are electronic media, simplified literature in rural languages, visits by mobile vans with audio-visual aids, hoardings, wall paintings and educational films etc.

32. Challenges for Mutual Fund Industry
Lack of diversified products range
Understanding of investors’ need
Public awareness at mass level
Un-stability of Stock Market
Dearth of liquid debt instruments
Protecting and maintaining the integrity and quality
Ensuring performance
Maintaining momentum to ensure viability
Providing competitive returns
For Islamic mutual funds to progress, a variety of challenges need to be overcome. The significant challenges are mentioned as following:
Protecting and maintaining the integrity and quality of the key attractions of Islamic financial products,
Ensuring performance compares favorably with non-Islamic financial products.
For Islamic finance to maintain its momentum it will need to ensure its viability and that any inappropriate associations do not undermine the integrity or quality of the products and services on offer.
The returns have to compare well on a risk-adjusted basis with non-Islamic ones.
Cont…

33. Challenges for Mutual Fund Industry
Mitigating the Risk involved
Inadequate Intellectual Capital
Comforting & convincing with bad past investment
experiences
Budgetary constraints for Marketing activities.
Low saving and Investment oriented society
Information disclosure and transparency
Choosing appropriate distribution network
Right timing to launch funds
In time after sale activities
Strict monitoring of regulators
For Islamic mutual funds to progress, a variety of challenges need to be overcome. The significant challenges are mentioned as following:
Protecting and maintaining the integrity and quality of the key attractions of Islamic financial products,
Ensuring performance compares favorably with non-Islamic financial products.
For Islamic finance to maintain its momentum it will need to ensure its viability and that any inappropriate associations do not undermine the integrity or quality of the products and services on offer.
The returns have to compare well on a risk-adjusted basis with non-Islamic ones.

34. Recommendations Team work for the growth of mutual fund industry
Mass awareness and education about mutual funds
Strengthening distribution network
Understanding the fact that related financial industries are
not a threat
Promoting healthy business practices and ethical code of conduct
Disseminating timely information
Establishing affiliations with mutual funds associations in other countries and promote one-to-one contacts
Media should play a more supportive and constructive role for awareness and disseminating information
Looking forward, for our mutual fund industry we would like to make several recommendations:
We have to understand the power of team work for the growth of mutual fund industry
Mass awareness and education about mutual funds
Strengthening distribution network to ultimately make it the main source of revenue generation
Understanding the fact that related financial industries are not a threat
Promoting healthy business practices and ethical code of conduct
Disseminating timely information
Establishing affiliations with mutual funds associations in other countries and promote one-to-one contacts
Media should play a more supportive and constructive role for awareness and disseminating information

35. becoming a true success story in the world’s financial markets.
The winning formula is the troika of performance, service and trust for meeting long-term goals and
becoming a true success story in the
world’s financial markets.

36. Thank you