The mutual fund industry will launch a collective awareness campaign to attract people to the industry, according to Senior Vice President – National Sales Manager Al Meezan Investment Management, Shahid Gul Motiwala.
On the sidelines of a seminar titled “Employees benefit – tax saving and retirement planning” on Tuesday, he said, “Gone are the days when potential customers come to you themselves.”
In reference to the declining saving trends in the country and challenges being faced by the mutual fund industry, Motiwala said now is the time to market products to the locals, who are usually less likely to save.
He said the middle class of Pakistan was hesitant to invest in mutual funds, rather, they preferred to deposit money in banks. According to him, that was why the size of the mutual fund industry was not greater than Rs230 billion, while bank deposits were around Rs500 billion, which was a cause for concern for the industry.
“We need to reach the Rs500 billion mark where banks stand today,” he said. “There is growth in mutual fund industry but it is slow.”
Comparing rural and urban saving trends over the last three years, he said the salaried class in urban areas had been under stress due to high inflation. On the contrary, rural incomes had soared and that offset the inflationary pressures in rural areas – although the rural population achieved high incomes due to an increase in cotton and wheat prices. “Reaching the rural population is still difficult,” he said.
The urban population has more knowledge of the mutual fund industry but less disposable income, while the rural population has more money but insufficient knowledge, he added.
Motiwala said that Al Meezan, which is currently managing over Rs29 billion in assets, not only offers tax benefits according to the income tax laws, but also offers attractive returns on investments on the basis of Islamic principles.
Published in The Express Tribune, May 18th, 2011.
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