Personal Banking - Investments - Arif Habib Investment Management Limited

The Pakistan Stock Market Fund (PSM) is an equity fund that invests in good quality Pakistani stocks with an emphasis on liquidity. PSM seeks to offer potentially high equity returns commensurate with the equity investment risk. The Fund is listed on the Karachi Stock Exchange. By ensuring that no more than 10% of the total net assets are invested in any one stock, and no more than 25% in any one sector, the Fund offers protection through diversification.

The Fund seeks to achieve superior returns and at the same time provide liquidity. Based on the Fund’s policy of investing a substantial portion in liquid shares (likely to be large market capitalization stocks) a fair degree of correlation with the KSE-100 Index can be expected. At the same time, investment in the “value picks” adds long term value for its investors.

The Pakistan Income Fund pursues an active investment strategy and asset allocation decisions are made on the basis of interest rate outlook in Pakistan. Being primarily an income fund with emphasis on managing interest rate risk, the fund focuses on keeping a fixed income portfolio of short duration. PIF has been able to deliver returns relatively better than most fixed income securities, as major portion of its funds has been invested in high yielding COT (carry over transactions) market of the Karachi Stock Exchange.

The Pakistan Income Fund invests in a range of debt instruments, short maturity securities, transactions aimed at earning a spread through simultaneous buying and selling of securities for two different settlement dates and reverse repurchase (REPO) arrangements including Carry Over Transactions (COT). The objective of the Fund is to seek high yields while balancing out the risk into a mix of debt and REPO investments).

The company offers two popular investment plans that combine the Pakistan Income Fund and Pakistan Stock market Fund: Smart Portfolio and Balanced Portfolio.

Smart Portfolio

This is a computer managed investment plan, which allocates the investment in the ratio of 75:25 between PIF and PSM. This plan regularly reallocates the portfolio back to the original ratio between debt and equity investments through automated adjustments, managed by a unique software. Switching takes place whenever the NAV prices of PIF and PSM record a change of 5% compared to each other from the original prices of investment or the new base prices.

Balanced Portfolio

The Balanced Portfolio invests equally between the PIF and PSM. The objective of this plan is to facilitate a Subscriber to benefit from the higher potential returns from investing in the PSM Fund while reducing the risk by balancing the investment with the Pakistan Income Fund.

Pakistan Capital Market Fund (PCM) is an open-end fund investing in a hybrid of equity, debt and money market securities. Allocation depends on the opportunities available within different asset classes – there is no set allocation limit for any asset class (with exception of an upper limit on government securities.) If a particular asset class offers better prospects, the Fund is likely to have higher allocation in such asset class and vice versa. Pakistan Capital Market Fund (PCM) is the first fund in Pakistan that can be converted from a closed-end to an open-end Fund. This conversion allows investors to benefit from the full value of NAV whenever they wish to cash out.