Asset Value of Mutual Funds Soars 41% in 2022

Mutual Funds of various Asset Management Companies (AMCs) attracted over half a billion in investments during 2022 mainly due to lucrative profit rates on the risk-free options. According to the Mutual Funds Association of Pakistan (MUFAP), the overall asset value managed by different funds and AMCs surged to Rs. 1.5 trillion by end of December 2022 as compared to Rs. 1 trillion recorded by the end of December 2021, showing a staggering growth of 41 percent year-on-year. The growth in investment of mutual funds was mainly attracted by high-profit rates on the low-risk mutual funds coupled with the tremendous spike in seasonal year-end impact. The profit rates on various mutual funds were offered up to 16 percent maximum, which also increased due to the high policy rate of the country which surged to 16 percent by end of 2022, and now stands at 17 percent in recent weeks. Besides high-profit rates, investment in mutual funds saw consistent growth due to the facility of digital account opening offered by various mutual funds managers. It is likely that the value of the demand-pull investment will go down in January which will further improve the profit rates of the unit holder or investment in the next couple of months. The investors park their investments and savings in the category of money market funds followed by income and equity funds. There are 313 funds being managed by 18 asset management companies in Pakistan. The share of companies with association or shareholding of banks stands higher than other asset management companies.