After the launch of Pakistan’s largest fund in the private sector, the ABAMCO Composite Fund, sized at Rs. 3 billion with an IPO of Rs. 1 billion set for public offer on May 14-15, 2004, ABAMCO Limited is gearing up for the launch of 2 more open-end mutual funds, a balanced fund and a fixed income fund.
Both of these funds will be joint label funds with institutional partners and will be sized at Rs. 1 billion each. MOUs have already been signed in this regard with Escorts Investment Bank and the Bank of Punjab and the funds are planned for launch in June.
Mutual funds are considered a safe option for small investors who have little knowledge about the equities market and/or hardly any access to the fixed income markets. A mutual fund is a pool of money that the fund manager invests in various markets on behalf of the unit holder.
Pakistan’s mutual fund sector has seen considerable growth and diversity over the past few years. From being 3% of the bank deposits the percentage has gone up to 5% of the bank deposits in Pakistan, which is still lower than the ratio in other developed counties. In USA, mutual funds are 125% of the bank deposits.
Until the early nineties the mutual fund industry in Pakistan was dominated by the public sector with NIT & ICP being the sole players. The introduction of private mutual fund managers and asset management companies has been a growth multiplier.
ABAMCO being Pakistan’s first & largest private sector asset management company has acted as a catalyst to this growth. Currently managing assets worth over Rs. 10.8 billion for several institutional and retail investors, ABAMCO is geared up to launch two open-end joint label funds, this amount is set to exceed Rs. 16 billion by July this year.
Imtiaz Noor Mohammad
Assistant Manager – Media & Publications
