Asset Allocation Funds
These funds have highly fluid investment portfolios that target the best of any asset class. They are a step ahead of Balanced funds, meaning that they can invest upto 100% of their net assets in any particular asset class or in any combination of asset classes. In a rising market, these funds generally take advantage of short term spread transactions, realizing their profits in small and rapid steps. In declining markets, they move swiftly towards safer asset classes. The element of risk in a asset allocation fund is generally higher than that of a balanced fund, but the returns are relatively higher as well.
Accessibility & Affordability
Most banks, financial institutions and other companies sell mutual funds and facilitate clients on behalf of the management company. Additionally, the initial amount is very small and this makes investing extremely easy and affordable.
means statement of transactions in Units in the folio of the Holder.
The objective of these funds is to provide a balanced mixture of safety, income and capital appreciation. The strategy of balanced funds is to invest in a combination of fixed income and equities. These funds maintain the debt and equity at certain ratios which are adjusted periodically based on market conditions.
means Sales Load deducted from the Net Asset Value in determining the Redemption Price.
Any day of the week but does not include any day which is a gazetted Government of Pakistan holiday or on which the Stock Exchange(s) in Pakistan are closed for business.
means the Trust Deed that is the principal document governing the formation, management or operation of the Trust.
means Sales Load deducted from the Net Asset Value in determining the Redemption Price.
means the definitive certificate acknowledging the number of Units registered in the name of the Holder issued at the request of the Holder.
means a bank, the Central Depository Company or any other Depository that for the time being may be appointed by the Trustee with the approval of the Management Company to hold and protect the Deposited Property or any part thereof as custodian on behalf of the Trustee.
means the initial investors, who shall be required to subscribe to and to hold number of Units of an amount to be in compliance with Rule 67-2 (f) for the minimum two years from the date of payment in full of such Units.
means such Units of the Trust that are issued to Core Investors with the condition that these are not redeemable for a period of two years from the date of issue. However, such Units are transferred with this condition and shall rank pari passu with all other Units save for this restriction. Any transfer of these Core Units, during the first two years of their issue, shall be affected only on the receipt by the Transfer Agent of a written acceptance of this condition by the transferee.
A risk management technique that mixes a wide variety of investments within a portfolio. It is designed to minimize the impact of any one security on overall portfolio performance.
means the aggregate proceeds of the sale of all Units at Offer Price after deducting therefrom or providing thereout any applicable Sales Load and Duties and Charges and Transaction costs and any other expenses chargeable to the Fund; and includes the Investment and all income, profit and other benefits arising therefrom and all cash, bank balances and other assets movable or immovable and property of every description for the time being held or deemed to be held upon trust by the Trustee for the benefit of the Holders pursuant to this Deed but does not include any back-end or contingent charges payable to the Management Company or any amount standing to the credit of the Distribution Account.
Distributor/ Distribution Company
means a company, firm or a Bank appointed by the Management Company and after intimation to the Trustee for performing the Distribution Function and shall also include the Management Company and the Trustee, subject to approval by the Management Company, if they perform the Distribution Function.
mean with regard to:
1.Receiving applications for issue of Units together with the aggregate Offer Price for Units applied for by the applicants;
2.Issuing of receipts in respect of (a) above;
3.Interfacing with and providing services to the Holders including receiving redemption applications, transfer applications, conversion notices and applications for change of address or issue of duplicate Certificates for immediate transmission, in accordance with the instructions given by the Management Company or the Trustee, to the Management Company or the Transfer Agent as appropriate; and
4.Accounting to the Trustee for all (1) moneys received from the applicants for issuance of Units; (2) payments made to the Holders on redemption of Units; and (3) expenses incurred in relation to the Distribution Function.
These funds invest mainly in equity of companies and undertake the risk of price movement at the stock exchange. Such funds are clearly expected to out-perform other types of funds in a rising market. When the market declines, equity funds tend to under-perform, when compared with other types of funds. Their strength is the expected capital appreciation and windfall income through capital gains. However, such funds are prone to losses when the market is declining.
These funds primarily invest in assets that pay a fixed-Rupee amount e.g., bank deposits, treasury bills, term finance certificates and government bonds. They are generally not affected by volatility at the stock exchanges. The element of risk is low and so is the return.
Front-end Load or Preliminary Charges
means the Sales Load that is included in the Offer Price of Units.
Income Tax on Mutual Funds/ Investors
The impact of taxation on investor, investing directly or through mutual funds is neutral. Mutual funds distributing ninety percent of income as dividend are exempt from payment of income tax. The unit/ shareholders are subject to tax on dividend distribution by mutual funds at the applicable tax rates.
Initial Period or Initial Offering Period
means a period determined by the Management Company not exceeding ninety days during which Units will be offered at the Initial Price in terms of the Offering Document.
means the price per Unit during the initial offering period determined by the Management Company.
A mutual fund allows you to request that your units be converted into cash at any time.
A mutual fund is a pool of money provided by various participants and then invested into equity and fixed income markets with the objective to provide safety of capital and returns to investors. The pool is managed on behalf of the investors by a team of specialized individuals, commonly known as fund managers or investment advisors.
Net Asset Value (NAV)
means per Unit value of the Trust arrived at by dividing the Net Assets by the number of Units issued.
means the prospectus, advertisement or other document (approved by SECP), which contains the investment and distribution policy and all other information in respect of the Unit Trust, as, required by the Rules and is circulated to invite offers by the public to invest in the Unit Trust.
Mutual funds being large entities are managed by professional portfolio managers who have the right levels of qualifications and experience to handle and search for best securities for the fund. These funds may have crucial, real time information from the markets and are able to execute large trade volumes on timely and cost effective basis.
means the face value of a Unit that shall be determined by the Management Company in consultation with the Trustee from time to time.
Regulatory Body/ Authority
Mutual funds are regulated by the Securities and Exchange Commission of Pakistan (SECP).
Risks of Investing in Mutual Funds
All investments in mutual funds and securities are subject to market risks. Their target return/ dividend range cannot be guaranteed. Their price is neither guaranteed nor administered/ managed. It is based on the NAV, which may go up or down depending, to some extent, upon the factors and forces affecting the stock market. Past performance is not necessarily indicative of future results. The risk may vary depending upon the investment strategy of funds and whether they are balanced, fixed-income or equity funds.
means the Register of the Holders kept pursuant to the Rules and the Trust Deed.
means the functions with regard to:
a. Maintaining the Register;
b. Receiving application for redemption and transfer/transmission of Units directly from Holder or legal representatives or through Distributor;
c. Processing requests for issue, redemption, transfer and transmission of Units and requests for recording of pledge or for recording of changes in information/ particulars/ data with regard to the Holders;
d. Issuing Account Statements to Holders;
e. Issuing Certificates including Certificates in lieu of undistributed income to Holders;
e. Dispatching income distribution warrants and allocating Units to Holders on re-investment of dividends.
f. Canceling old Certificates on redemption or replacement;
g. Maintaining records of lien/ pledge/ charge; and
h. Keeping record of change of addresses/other particulars of the Holders.
Reporting or Base Currency
means the currency used in presenting the financial statements, which will be Pakistani Rupee.
means the Non-Banking Finance Companies (Establishment and Regulation) Rules 2003, as amended from time to time.
means the Securities and Exchange Commission of Pakistan, established under section 3 of the Securities and Exchange Commission of Pakistan Act, 1997.
means Karachi Stock Exchange, Lahore Stock Exchange, Islamabad Stock Exchange or any other stock exchange registered under section 5 of the Securities and Exchange Ordinance.
means an individual, firm, corporate or other entity appointed by the Management Company to identify solicit and assist investors in investing in the Scheme. The Management Company shall compensate the Investment Facilitators/ Sales Agents out of the Sales Load collected by it in the Offer Price.
means the sales charges or commission (excluding Duties and Charges) not exceeding five percent (5%) of the Net Asset Value, which may be included in the Offer Price of certain classes of Units or deducted from the Net Asset Value in order to determine the Redemption Price of certain classes of Units.
means every Business Day provided that the Management Company may with the prior written consent of the Trustee and upon giving not less than seven days notice in at least one newspaper, either English or Urdu, declare any particular Business Day not to be a Subscription Day.
Since all investments in mutual funds are held in the custody of a Trustee, which is either a reputed bank or depository company, this ensures transparency in both the values of the transaction taking place as well as the amounts that are received and paid out, hence reducing the risk of misappropriation to a significant degree.
means a company including a Bank that the Management Company shall appoint for performing the Registrar Function.
Trust, Unit Trust or Scheme
means the Unit Trust constituted by the Trust Deed for continuous offers for sale of Units.
means one undivided share in the Trust.
means the investors for the time being entered in the Register as owner of a Unit, including investors jointly so registered pursuant to the provisions of the Trust Deed.