The document discusses the history and current state of the mutual fund industry in Pakistan. It provides statistics on the size and growth of the industry since the 1960s. It also compares the Pakistani mutual fund market to the global and Islamic fund industries. The document outlines opportunities for growth in the market, such as increasing education and awareness among investors. It also discusses challenges, such as a lack of product diversity and instability in the stock market. Recommendations include strengthening distribution networks and promoting ethical practices to build trust.

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

3. History of Mutual Funds in Pakistan
 1962 - Government of Pakistan established NITL which launched
first Open End Equity Fund in Pakistan – NIT
 1966 - 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
 1994-95 - More funds launched in private sector
 2006 - Total number of AMCs are 30 managing 56 mutual funds

4. Mutual Funds Industry in 2006
Total Industry Size - Rs. 171 billion
Open end Rs. 129.73 bn (US$ 2.83 billion)
Closed end Rs. 41.33 bn
 Total number of Funds - 56
Open end 34
Closed end 22
 Total number of AMC - 30
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.

6. Asset Management Companies in Pakistan

7. Mutual Funds in Pakistan

8. Year-wise Growth of Mutual Funds Since 2001
8

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

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

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 $ 19.413 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.

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. 9.12 bn (5.33%)
17

18. Size of Islamic Mutual Fund in Pakistan - Rs. 9.114 bn
Market Share of Al Meezan Investments - Rs. 6.925 bn
18

19. Total Mutual Fund Industry in Pakistan - Rs. 171 bn
Market Share of Al Meezan Investments - Rs. 6.925 bn
as of September 30, 2006 19

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?

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

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
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
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

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
 Emails
 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

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
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

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
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

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

35. 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