Mutual Fund Faysal Bank Asignment 3

INVESTMENT BANKING
AND SECURITIES
ANALYSIS
Name: Zohaib Jamil
Student ID: 1611-2018
Program: BBA
Department: Faculty of Management Sciences.

Project Title: Faysal Bank Mutual Funds Investment.
Submitted to Sir Sundeep Kumar

Mutual Fund:
A mutual fund is an investment vehicle that pools money from

multiple investors to buy a diversified portfolio of securities, such as
stocks, bonds, and other financial instruments. The fund is managed
by a professional portfolio manager who makes investment decisions
on behalf of investors.
When an investor buys shares in a mutual fund, he is effectively

buying a portion of the entire portfolio rather than individual
securities. The value of shares is determined by the performance of
the underlying investments, with gains or losses distributed among
investors in proportion to their holdings.
Mutual funds offer many benefits to investors, including:
1. Diversification: By investing in a wider range of securities than an

individual could reasonably purchase on their own, mutual funds offer
greater diversification and spread the risk of investment losses.
2. Professional Management: Mutual funds are managed by

professional portfolio managers who have the experience and
knowledge to make informed investment decisions based on market
conditions and economic trends.
3. Accessibility: Mutual funds are available to a wide range of
investors, with a low minimum investment requirement, making it
easy for investors to participate in the market.
4. Liquidity: Mutual fund shares can be bought and sold on the open
market, providing investors with the flexibility to access their money
when they need it.
5. Transparency: Mutual funds are required to disclose their

holdings and performance to investors on a regular basis, providing
transparency and accountability to investors.
Money Market Scheme. (Islamic):
An Islamic money market scheme is an investment vehicle that

follows Islamic finance principles and invests primarily in short-term,
low-risk financial instruments that comply with Shariah law.
In Islamic finance, investments must be made in accordance with the

principles of risk sharing and asset security, and interest-based
investments (known as riba) are prohibited. Therefore, an Islamic
money market scheme invests in financial instruments such as
treasury bonds, government and corporate sukuk (Islamic bonds) and
Islamic bank deposits that comply with these principles.
Investors in Islamic money market schemes receive a return on their

investment based on profit sharing rather than interest. This means
that the returns obtained by the scheme are shared among investors in
proportion to their holdings. The fund manager of the scheme charges
an administration fee for its services, which is deducted from the
income earned by the scheme.
Islamic money market schemes provide investors with a low-risk,
short-term investment option that complies with Shariah law. They are
suitable for investors looking to preserve their capital while earning a
modest return on their investment. However, as with any investment,
there is always a risk that the value of the scheme's investments could
decline, resulting in losses for investors. It is important for investors
to carefully consider their investment objectives, risk tolerance and
investment horizon before investing in an Islamic money market
scheme.
Investment Objective / Money Market Scheme:
Following are the possible objectives of investing in money market

mutual funds:
Capital preservation: Aim to protect the invested capital from

significant loss and maintain its value.
Liquidity: Provide easy access to funds, allowing investors to quickly

convert their investment into cash.
Safety: Focus on low-risk investments to minimize the potential for

losses.
Income generation: Generate modest returns through interest or

discounts on the short-term securities held by the fund.
Cash management: Serve as a temporary parking place for excess

cash, providing a secure and convenient option for managing
available funds.
Diversification: Add a low-risk component to an investment

portfolio, reducing overall volatility by combining money market
funds with other asset classes.
With Some Figures:

Shariah Compliant Money Market (Annualized Return)
1 15 30 90 180 270
Fund Ratin Validi YT MT
NAV DA DA DA DA DA DA
Name g ty D D
Y Y Y Y Y Y
ABL Jun
16.4 18.6 18.6 19.0 19.0 18.3 16.9 16.5
Islamic AA(f) 02, 10.00
7 2 2 5 1 4 9 9
Cash Fund 2023
AKD
Islamic Jun
17.1 17.8 17.8 18.1 17.5
Daily AA(f) 01, 50.00 0.00 N/A N/A
8 1 6 1 0
Dividend 2023
Fund
Al Ameen Jun
AA+ 115.4 15.6 18.5 18.5 18.7 18.7 17.9 16.6 15.9
Islamic 02,
(f) 3 6 4 4 1 1 3 3 3
Cash Fund 2023
Al Ameen
Jun
Islamic AA+ 100.0 16.4 18.8 18.8 19.0 18.9 18.3 17.1 16.6
02,
Cash Plan (f) 0 2 7 7 6 7 8 1 5
2023
I
AL Habib Jun
AA+ 100.0 16.1 18.3 18.4 18.3 18.2 17.7 16.6 16.3
Islamic 01,
(f) 0 7 0 3 1 8 9 1 2
Cash Fund 2023
Alfalah
Islamic Jun
102.3 19.3 19.2 19.2 19.5 19.4
Money 01, N/A N/A N/A
4 9 7 7 2 1
Market 2023
Fund
Alfalah
Islamic Jun
100.0 16.5 19.4 19.4 19.2 19.2 18.6 17.2 16.7
Rozana AA(f) 01,
0 9 2 2 5 7 0 3 5
Amdani 2023
Fund
Alhamra Jun 100.3 16.4 N/A 17.1 N/A N/A N/A N/A N/A
Cash 01, 0 4 1
Managem 2023
ent
Optimizer
Alhamra
Islamic Jun
AA+ 16.5 18.7 18.6 18.7 18.1 16.9 16.6
Money 01, 99.51 0.00
(f) 1 1 6 0 9 9 2
Market 2023
Fund
Atlas
Islamic Jun
501.8 16.2 18.9 18.9 19.1 19.1 18.4 17.2 16.6
Money AA(f) 01,
5 8 6 6 3 2 5 8 0
Market 2023
Fund
Faysal Halal Amdani Fund
AA(f) Jun 01, 2023
115.88 16.49 18.78 18.34
18.81 18.78
18.03 16.98
16.65
365 DAY 16.51
N/A 15.66
16.46
16.23 N/A
16.61 N/A
16.54 16.26 16.53
Calculation:
Investment account for Islamic Funds,
Rs 5,000
Percentage: 18%
With daily return as per following calculation:
= 5,000 x 0.18 ÷ 365 x 30 Days Rs = 2.465 (Return Per Day)
Benchmark of Money Market Scheme:
In Pakistan, another commonly used benchmark for money market

schemes is the 3-Month Pakistan Money Market (PMM) Interbank
Rate. The PMM Interbank Rate represents the average interest rates at
which banks lend to and borrow from each other in the interbank
market for a three-month duration. Money market schemes in
Pakistan may use the PMM Interbank Rate as a benchmark to
measure their performance against the prevailing market rates for
short-term funds. This benchmark helps investors gauge the
competitiveness of the returns generated by money market schemes in
the country.
Funds Objectives:
Faysal Money Market Fund aims to generate competitive returns with

minimum risk and enhanced liquidity by investing primarily in short-
term government securities, term deposits and money market
instruments with weighted average time to maturity of Net Assets not
exceeding 90 days.
Key Benefits:
Low credit risk

No minimum holding period of investment
Encashment without any penalty
The fund is CDC eligible and its units can also be used as collateral at
the PSX
Invest with as low as PKR 5,000/-
Salaried / Non-salaried Investors can avail tax credit as per section 62
of Income Tax Ordinance 2001.
Funds Information of Faysal Funds Management:
 Fund Type - Open End Fund

 Category - Money Market Scheme
 Tenure - Prepetual
 Risk Profile - Low
 Stability Rating - AA (f) (PACRA)
 Launch Date - December 13, 2010
 Benchmark - 70% Three months PKRV rates + 30% three
months average deposit rates of three AA-rated scheduled
banks.
 Pricing Mechanism - Backward
 Management Fee - Management Company shall be entitled to an
accrued remuneration equal to an amount not exceeding 1% of
Average Annual Net Assets, within allowed expense ratio limit.
Management shall disclose actual rate of management fee
charged as percentage of net assets of collective investment
scheme in monthly Fund Manager Report
 FrontEndLoad-Upto2%ofNAV
 Back End Load - Nill
 Minimum Investment - PKR 5,000
 Trustee - Central Depository Company of Pakistan
 Auditor - A. F. Ferguson & Co
 Legal Advisor - Mohsin Tayebaly & Co
Procedure for Investment in Money Market Scheme:

The procedure for investing in money market schemes may vary
depending on the specific mutual fund company and country.
However, here is a general overview of the typical procedure for
investing in a money market scheme:
Research and Selection: Conduct research to identify suitable money

market schemes that align with your investment objectives, risk
tolerance, and investment horizon. Consider factors such as the fund's
track record, expense ratio, fund manager's expertise, and investment
strategy.
Account Setup: Open an investment account with the Mutual Fund

Company or financial institution offering the money market scheme.
This may involve completing application forms, providing necessary
identification and documentation, and agreeing to the terms and
conditions.
Investment Amount: Determine the amount you wish to invest in the

money market scheme. Some funds may have minimum investment
requirements, so ensure you meet the specified criteria.
Fund Allocation: Specify the allocation of your investment amount

to the money market scheme. This can typically be done by
completing the appropriate forms or providing instructions to the
Mutual Fund Company or financial institution.
Know Your Customer (KYC) Process: Complete any required

KYC procedures, which may involve providing personal and financial
information, submitting identification documents, and complying with
regulatory requirements.
Investment Confirmation: Once your investment allocation is

confirmed, you will receive a confirmation statement outlining the
details of your investment, such as the number of units/shares
purchased and the applicable net asset value (NAV).
Redemption and Exit Strategy: Understand the redemption process
and any applicable exit fees or penalties associated with redeeming
your investment from the money market scheme. This information is
crucial if you need to access your funds before the specified
investment period.
Ongoing Monitoring: Monitor the performance of the money market

scheme periodically to assess its alignment with your investment
objectives. Stay updated with any communications or reports
provided by the Mutual Fund Company or financial institution.
It is important to note that the specific procedures and requirements

may differ among mutual fund companies and financial institutions. It
is advisable to review the specific documentation and guidelines
provided by the institution offering the money market scheme and
consult with a financial advisor if needed.

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INVESTMENT BANKING

Department: Faculty of Management Sciences.

Submitted to Sir Sundeep Kumar

A mutual fund is an investment vehicle that pools money from

When an investor buys shares in a mutual fund, he is effectively

Mutual funds offer many benefits to investors, including:

1. Diversification: By investing in a wider range of securities than an

2. Professional Management: Mutual funds are managed by

5. Transparency: Mutual funds are required to disclose their

Money Market Scheme. (Islamic):

An Islamic money market scheme is an investment vehicle that

In Islamic finance, investments must be made in accordance with the

Investors in Islamic money market schemes receive a return on their

Investment Objective / Money Market Scheme:

Following are the possible objectives of investing in money market

Capital preservation: Aim to protect the invested capital from

Liquidity: Provide easy access to funds, allowing investors to quickly

Safety: Focus on low-risk investments to minimize the potential for

Income generation: Generate modest returns through interest or

Cash management: Serve as a temporary parking place for excess

Diversification: Add a low-risk component to an investment

With Some Figures:

Faysal Halal Amdani Fund

AA(f) Jun 01, 2023

115.88 16.49 18.78 18.34

365 DAY 16.51

16.54 16.26 16.53

= 5,000 x 0.18 ÷ 365 x 30 Days Rs = 2.465 (Return Per Day)

Benchmark of Money Market Scheme:

In Pakistan, another commonly used benchmark for money market

Faysal Money Market Fund aims to generate competitive returns with

Low credit risk

Funds Information of Faysal Funds Management:

 Fund Type - Open End Fund

Procedure for Investment in Money Market Scheme:

Research and Selection: Conduct research to identify suitable money

Account Setup: Open an investment account with the Mutual Fund

Investment Amount: Determine the amount you wish to invest in the

Fund Allocation: Specify the allocation of your investment amount

Know Your Customer (KYC) Process: Complete any required

Investment Confirmation: Once your investment allocation is

Ongoing Monitoring: Monitor the performance of the money market

It is important to note that the specific procedures and requirements

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