MUTUAL FUNDS

For investors willing to save for their long term goals while undertaking acceptable risk managed by professional funds managers, mutual funds are the ideal saving vehicle.

A mutual fund is a trust or a company that pools resources from various investors by selling them fund units and then invests those funds into various investment instruments and securities on behalf of the unit holders with a view to increasing the underlying value of the investment portfolio.

Mutual Funds can be of different types such as income funds, growth funds etc. Each type of fund offers specific advantages to investors such as regular income or capital appreciation amongst others. 

A mutual fund is a separate entity from the asset management company that manages that mutual fund.

Savers / investors should invest in a mutual fund because a mutual fund provides them the appropriate investment vehicle through which they can benefit from the rewards of capital market investing. Investors who do not have the time and expertise to monitor their investments and want to take exposure in the capital markets and its positive returns can benefit from professional management and market knowledge offered by a mutual fund. 

An investor has the following advantages when he invests in a good mutual fund like Alfalah GHP Value Fund:  

• Professional Management

• Diversification

• Market Knowledge

• Risk Management

• Liquidity

• Reasonable Returns

It may be mentioned that in USA, mutual fund assets under management exceed bank deposits and a large portion of households savings are invested in mutual funds. Regionally, Indian mutual fund industry is almost 10% of Indian bank deposits while in Pakistan, mutual funds account for approximately 5% of total bank deposits (as at 2005).