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Mutual Fund Basics

A Mutual Fund is a large pool of money, created by a multiple people and entities and are managed by a team of experienced individuals as part of a licensed Asset Management Company. Mutual Funds exist to make investments and give returns to their investors.

Mutual Funds are operated by Asset Management Companies (AMCs) are licensed by the regulator to do so after meeting a range of requirements. A Mutual Fund is set up under a Trust structure with a 3rd Party entity designated as the Trustee. All investments made by the fund, its bank acounts, all transactions are, in fact, managed by the Trustee at the advice of the AMC. The Trustee is obligated to follow the instructions of the AMC, as long as these instructions do not violate the “Trust Deed” which is a legal agreement signed by the AMC and the Trustee that governs the operating framework of the Trust (i.e. the mutual fund).

In Pakistan, Non-Banking Finance Companies (like AMCs, Insurance Companies, Investment Banks etc) are regulated by the Securities and Exchange Commission of Pakistan, which has been empowered by an Act of Parliament to perform this regulatory function. The SECP is responsible for protecting the customers interest by setting rules under which AMCs and Mutual Funds operate, as well as stringently reviewing AMCs and Mutual Funds consistently to ensure that all the rules are being complied with.

Open-end Funds
These are mutual funds which allow investors to invest and redeem (withdraw) their money at a time of their choice. continually create new units or redeem issued units on demand. They are also called Unit Trusts. The Unit holders buy the Units of the fund or may redeem them on a continuous basis at the prevailing Net Asset Value (NAV). These units can be purchased and redeemed through Management Company which announces offer and redemption prices daily.

These funds have a fixed number of shares like a public company and are floated through an IPO. Once issued, they can be bought and sold at the market rates at the Stock Exchange where they are listed at the prevailing rates at any point of time.

A fund’s Net Asset Value (NAV) represents the value per unit. The NAV is equal to the market worth of assets held in the portfolio of a Fund, minus liabilities, divided by the number of units currently issued to investors.

NAV Per Unit = (Current Market Value of all the Assets – Liabilities) / Total Number of Units Outstanding

The sales and redemption price of units might be different from the NAV if there there is an element of a “Sales Load / Front End Load” or “Back End Load”. The sale and redemption price is declared on a daily basis by the Funds and can be viewed on their websites.

Sales Load / Front End Load is a small service fee that sometimes is charged by Asset Management Companies upon the investment in Mutual Funds. This fee is used to compensate the sales teams for their efforts and to maintain a customer facing infrastructure. It is mandatory for AMCs to disclose this charge before you make any payments.

Back End Load is sometimes charged when customers withdraw money from funds. This is rarely used and is applied only in case of funds that have a “lock in” period. Again, it is mandatory to disclose this fee before a customer signs up for the product.

A benchmark’s performance is determined based on past performance of the fund and is considered as an average rate of return for that year in particular. A Mutual Fund’s performance is compared with the benchmark in order to find out whether the Fund performed better than the market.

Advantages of Mutual Fund

Mutual funds make saving and investing simple, accessible, and affordable. The advantages of Mutual Funds with MCB Arif Habib include the following:-

– Accessibility
MCB Arif Habib is available for you around the clock. With offices across Pakistan and an online platform that makes your transactions very simple, you don’t really have to think too much about who to invest with.

– Liquidity
You can convert your holdings into cash whenever you want. We will transfer the money to your bank account within the next couple of working days. We are also launching an ATM card soon, so you should be able to just walk upto your nearest ATM and take money out too.

– Diversification
Your investments are spread across multiple investments, reducing your risk and helping you take advantage of a broad range of available avenues in one go.

– Professional Management
We evaluate all opportunities that arise in the market, carefully examine them and then make informed decisions. This is not an easy task for the average individual who also has his / her daily routine to deal with. We do this with the support of a dedicated investment management team that is highly qualified, trained and certified on global standards to perform this task.

Opening / Operating your account

If you are a retail investor, Simply visit iSave and click the “New Customer” button. Please keep the following information handy when opening the account:

– Your CNIC
– Your Bank Account Number
– Access to your mobile phone and email address

Organizations that wish to invest with us  can write to “info@mcbah.com” and we will have someone meet you with details on everything that’s needed.

iSave is a completely online portal introduced by MCB – Arif Habib Savings as a convenient, online way to meet all your investing and saving needs within seconds. If you are are an existing customer at MCB-AH, you can easily make investments, switch between various funds and withdraw your money with just a few clicks.

New customers can sign up for an account within minutes using the “New Customer” section.

Customers that already had access to their accounts via “Web Bachat” Services have automatically been migrated to iSAVE and they can now just use the same username and password to login to iSAVE as well.

For more information, visit iSave.

iSave allows you to:
Open an investment account within minutes without being tied up in tedious forms, paperwork and branch visits.
Get started with your first investment within minutes using its state-of-the-art, advanced digital infrastructure,
Make seamless and quick withdrawal/conversion requests.

Manage your investment portfolio and have your online statement readily available using only a few clicks.

Have your investments automatically routed to the safest investment option backed by bank deposits.
Get better returns than offered by any bank

Yes they can. We encourage prospective international clients to contact us by email at info@mcbah.com or via whatsapp at +92 300 4362224

Yes, you can invest in as many funds as you wish!

You can invest for as long as you wish! Even a day! Do keep in mind though, that funds should be chosen based on the how long one wishes to invest and what your financial requirements and risk appetite is.

Simply log in to your iSave account, place a request and then transfer funds via your internet banking portal. Alternatively, we can pick up cheques!

Yes, Zakat will be deducted unless Zakat Exemption Declaration Form (CZ-50) / Zakat Affidavit is submitted to the company. If you have your Zakat Affidavit with you and your profile says you are not exempt from Zakat, you need to simply take a picture of the Zakat Affidavit from your phone and email it to us at info@mcbah.com with your CNIC number from your registered email address and we’ll take care of the rest!

Simply login to your iSave account, hit the redeem button and chose the fund from which you wish to windraw funds. If your account is IBFT Verified, we will transfer the funds to your bank account, otherwise we will send you a cheque at your registered address.

If you do not receive your iSave Activation Code, you can hit the request a call button and our teams will call you up on your specified phone number. Please do check, however, that you have entered the right phone number.

Please refer to the online payments instructions specified here: https://www.mcbah.com/payment-instructions/

  1. iSave Swift Account
  2. Level 2 Account
  3. Full Account
Account type Transaction limit Total investment amount during a year Document required Fund details
Swift Account 25000 per transaction 100,000 CNIC required Direct investment in Cash Management Optimizer using 1Link
Level 2 Account 800,000 per annum 800,000 face to face verification/ biometric verification
Full Account Unlimited Unlimited To fulfill all account opening requirement Any fund of choice

Once you sign up all you need to do is follow the steps below to make an investment:

  • Log in to your iSave account using your Username (you can also use your CNIC as the username) and Password.
    Click on Invest and fill out the investment form.
  • Select the fund, and fill the amount (iSave Swift Account holders will not be able to modify the fund) Click Proceed.
  • Once you have seen the “Your investment request has been placed” message, you will receive an email with instructions.
  • Transfer the payment amount due. If you have online banking access with Standard Chartered Bank, Faysal Bank, Summit Bank, Habib Metro, NRSP Bank or Bank Al-Habib you can transfer funds to us online. Alternatively, you may request a cheque pick-up via TCS Haazir (currently only available for customers from Karachi, Lahore, Islamabad and Rawalpindi).

You will be sent a transaction completion update as soon as it is processed successfully!

If you have just opened your Swift Account, you will initially only be eligible to invest in MCB Cash Management Optimizer Fund, Alhamra Daily Dividend Fund and the Alhamra Islamic Income Fund. These are low risk funds that aim to give you returns withour exposing you to any risk.
Once you complete a risk profiler after logging in, you will be allowed to invest in other products as well.
If you have opened an account on a paper based form with us, all funds will be available to you immediately.

IBFT stands for “Inter Bank Funds Transfer” and is a process that allows us to send you your funds directly to your bank account whenever you chose to withdraw them.
The verification process takes a few working days and until the verification is complete, we will be sending you a cheque for your funds.
Accounts may be not be IBFT Verified for a number of reasons. Please contact customer support at 0800 – 62224 for further assistance and we would be happy to help you through in case there are any problems in this regard.

Once you start saving with iSave Swift, you’ll definitely want to upgrade to our advanced level. Why?

  • More Funds to choose from
  • Increased Investment Limit (learn more)

Visit MCBAH.com and hit the chat icon or request a call back. We’d be happy to help you!

There are no fees to transact with us online (submit an investment request online . If you chose work via one of our distributors or via our on ground teams, a small fee may be charged upon every investment you make.

There are no additional charges if you wish to close your account. You may simply withdraw all the funds you have (relevant taxes may apply).

Growth unit: The investment remains in the Fund until the investor submits a redemption form to encash part or whole of the investment.

Income unit: The investor opts to withdraw a certain amount from the investment at regular intervals.

Bachat unit: While the investor may redeem the investment at any point in time, it is advised that the investment is kept intact for a longer time period in order to gain maximum returns and minimize risk. The investor is not charged any FEL, and 0% BEL will be charged if the amount is not redeemed before 2 years.

“You can utilize our various Value Added Services to access your account balance:
– Log in to your iSave Account to view latest value of your savings
– Your monthly Electronic Statement will be sent at your registered email address at the close of every month.
– Call up our 24/7 Toll Free No. where you can request for your electronic statement or speak to our friendly investor services staff
– Through SMS by simply writing BALYOUR REG NO. and sending it to 8622 from your registered mobile number
– Subscribe to our Daily NAV alerts through SMS & EMAIL”

“at MCBAH we love to hear from our customers as your feedback is extremely important in order to provide best services. For the same we encourage our customers to contact us through:
– our Toll Free No.0800 62224 where our friendly investor services staff are available to assist you round the clock 24/7
– drop us an email at info@mcbah.com
– log in to our website and give us your feedback by:
– Filing in our HelpDesk – QA Form
– Hit Request a Call button and we will call you
– Use our Web Chat to Talk to us
– You can get in touch via WhatsApp (0300-4362224).
– You can also drop by at any of our regional offices for details click here(branch address page)”

“we encourage our customers to opt for electronic Statement of Account due to instant and secured delivery. Plus you also do your bit to save the environment by not using paper. However, if at the time of account opening you have opted to receive your statement through POST, we will be sending you the same once a year and you can request for additional statements by calling up our investor services department at 0800 62224.

There are no charges for physical statement of account.”

through our Transaction Based SMS & EMAIL Alerts we keep you informed regarding your transaction status from the time you submit the transaction till you receive the statement of account. Plus you can also track your transaction through your iSave account’s Pending Transactions menu

Islamic Investments

Shariah Compliant Investments are investments those that have been through a dedicated team with a shariah compliant objective. These teams use shariah compliant investment tools and the areas investments are made in, along with the processes used are extensively monitored by our esteemed Shariah Advisors.

Funds must follow a variety of rules, including investing only in Shariah-compliant companies, appointing a Shariah board, carrying out an annual Shariah audit and purifying certain prohibited types of income, such as interest, by donating them to a charity.

Tax Credit

According to Section 62 of the Income Tax Ordinance, 2001, a “resident” tax payer in Pakistan is eligible to claim a reduction in their taxes by investing in mutual funds. For details, head on to our tax savings calculator. To claim your tax rebate, simply share your investment statement with your HR dept to make the required adjustments!

Revised on : February 2nd, 2018