CDC cuts service tariffs for mutual funds

Assets under management of mutual funds fall to Rs610 billion

KARACHI: The Central Depository Company (CDC) has reduced its service tariffs by up to 57% for the mutual fund industry which are applicable to different categories of funds.

Apart from that, the CDC has rationalised the trustee fee for small-sized mutual funds or schemes by permanently eliminating the minimum fee component and implementing a flat rate instead of the slab system, according to a statement issued by the CDC.

Assets under management (AUMs) of the mutual funds industry decreased from Rs622 billion as on June 30, 2017 to Rs610 billion as of June 30, 2018. During the year, 38 new open-ended mutual funds were launched while 13 funds completed their terms and matured.

As on June 30, 2018, there were 19 asset management companies in the country managing 259 funds including open-ended and closed-end funds as well as voluntary pension schemes, according to the Mutual Funds Association of Pakistan (Mufap) Yearbook 2018.

CDC reduces fee to ramp up market

Among the three categories, the investors parked the biggest sum in open-ended funds totaling Rs563.99 billion, followed by Rs26.13 billion in pension funds and Rs19.62 billion in closed-end funds. Biggest inflows were seen in money market funds while biggest outflows were recorded in income funds, said the report.

Equity funds (both conventional and Shariah-compliant) dominated AUMs of the industry with the largest share of the mutual fund industry at Rs231 billion and a market share of 38%.

Money market funds (both conventional and Shariah-compliant) at Rs131 billion held the second largest industry share of 21%, followed by income funds (both conventional and Shariah-compliant) at Rs89 billion with industry share of 15%.

“The current reduction by the CDC for mutual funds has come into effect from July 1, 2019 and is expected to facilitate asset management companies in making their funds and schemes more investment-worthy in the current challenging times,” the CDC said. 

Published in The Express Tribune, July 2^nd, 2019.

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