Devising a Framework for Mutual Fund Investments in Banking Sector : A Case to Faysal Bank

Abstract

Mutual fund has not developed in Pakistan as it is compared with the international market that’s why investor feels reluctant, because of their poor knowledge in the field of mutual funds in term of their structure and regulation. Till now in Pakistan investor still prefer the traditional modes of investments as going in real estate, fixed deposits etc. There are different financial institutions and asset management companies which are working in Pakistan under the umbrella of Mutual Funds Association of Pakistan (MUFAP), governed by SECP. They are providing assistance to their clients but still there is a huge gap in the Pakistani market that is still need to be fulfilled. Companies working under the MUFAP are more or less making their investment strategy in stock exchange market as it is very well known investment option in the capital market. There is an another emerging market known as Pakistan Mercantile Exchange which has not been fulfilled to its potential as it is much more safer then to the stock exchange market like if the economy goes against the portfolio options then still the investor will not bear as much loss if it is compared to the investment made in the stock exchange market. As by looking over the economy of Pakistan, the main capital providers are either the banks or few of the companies who are the capital providers in term of the investment perspective. In this study we are offering a frame work to Faysal bank to become a pioneer investor in the commodity market while making their portfolio investment in Pakistan mercantile exchange by offering commodity fund which is a type of mutual funds. This project is proposing a series of recommendations in accordance to Internal as well as External