A mutual fund is a general term for funds that allow you to pool your money with that of other investors and are managed by a team of investment professionals. The term may vary across countries, but mutual funds may also be referred to as collective investment schemes, unit trusts or simply as funds. The pooling of your money generally creates greater buying power, enabling you to invest in a wider range of investments than would be possible for most individual investors.
Each investor in a fund owns units (or shares) which represent a part of a fund’s portfolio holdings. Mutual funds can be categorized by the type of assets they invest in (such as Shariah complaint shares, Shariah complaint Sukuk, cash placed with Islamic financial institutions or other Shariah complaint securities). You can refer to the mutual fund’s prospectus and fact sheets to get a better understanding of their respective investment objectives and policy (for example, type and mix of investments) and past performance.
Open-end Funds
They can issue and redeem units at specified times to meet subscription or redemption requests from investors. Generally, buying and selling of units take place directly between investors and the fund or its agents. The price per unit of an open-end fund varies in proportion to the fund’s net asset value, reflecting its performance.
Fees of Islamic Mutual Funds
Mutual funds may charge various fees, and it is best to refer to the fund’s prospectus or fact sheets to understand these charges.
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Management fee
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Front End Load
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Back End Load
Islamic mutual funds are Shariah-compliant, adhering to Islamic principles by avoiding interest-based transactions. These can broadly be divided into four main categories:
1. Islamic Money Market Funds
These funds seek to maintain a stable net asset value by investing in short-term, high-grade Shariah complaint securities available in the money market. They are generally the safest, most stable securities available, including Shariah complaint certificates of deposit and Shariah complaint commercial paper.
2. Islamic Equity (Stock) Funds
As the name suggests, Equity Funds consist mainly of Shariah complaint stock investments and are the most common type of mutual funds. Often, Shariah complaint equity funds focus on a particular type of investment strategies, such as growth, value, large caps and small caps, or themes such as property, energy and healthcare. The funds can be invested globally, regionally or in single countries.
3. Islamic Sukuk (Fixed) Funds
These funds invest mainly in Shariah complaint government Sukuk, Shariah complaint corporate Sukuk or Shariah complaint mortgage-backed securities. The returns of a Shariah complaint Sukuk fund may vary depending on the type of Sukuk. Typically, Sukuk funds investing in short-term Sukuk are less volatile. Sukuk funds investing in Shariah complaint corporate Sukuk generally aim to obtain higher yields, but they carry greater risk.
4. Islamic Hybrid Funds
These funds invest in a mix of Shariah complaint stocks and Sukuk and may also hold Shariah complaint money market instruments, which can vary proportionally over time or remain fixed. They may be further sub-divided into balanced funds, asset allocation funds and lifecycle funds.
Yes, you can open a digital account via Alfa App. The platform allows you to open your account, perform risk profiling and allows you to invest and redeem among other functions.
You can open Sahulat Sarmayakari Account or Sarmayakari Account digitally via Alfa App to invest in mutual fund.
Customer whose age is 18 years or above and have an existing BAFL account can open mutual fund account via Alfa App.
By simply filling the required details on Alfa App — no additional documents are required for opening a Sahulat Sarmayakari Account.
The Sahulat Sarmayakari Account is a basic investment account that provides digital access to low and moderate funds. It has a single transaction limit of Rs. 400,000/-, an annual investment limit of Rs. 800,000/.
The Sarmayakari Account is a full-fledge digital investment account with no maximum investment limits. The customer can invest in low, medium and high-risk funds. Customers will need to upload mandatory documents during the account opening process.
Mandatory documents include:
- Valid CNIC/NICOP/Passport
- Business/employment proof
- Source of income
- Source of fund
- Digital Signature
While investing in mutual funds below charges can be applied
- Front End Load
- Back End Load
- Management fee
In case of any grievances/complaints related to the fund, you can either lodge a complaint with Bank Alfalah Limited at 021 111 225 111 or visit any of Bank Alfalah’s branches or email us at contactus@bankalfalah.com and you will be informed of the resolution accordingly.
You can also either lodge a complaint with Alfalah Asset Management Limited at 021 111 090 090, or visit any of the Investment Centers or email at aaml.is@alfalahamc.com and you will be informed of the resolution accordingly.
If you are not satisfied with our response, you may contact:
Banking Mohtasib Pakistan: Karachi Secretariat, Banking Mohtasib Pakistan Secretariat, 5th Floor, Shaheen Complex, M R Kiyani Road, Karachi.
Telephone: +9221-99217334
Facsimile: +9221-99217375
Email: info@bankingmohtasib.gov.pk
*Terms & Conditions apply.
“Customers may register their complaint through SBP’s customer complaint management service ‘Sunwai’ (https://sunwai.sbp.org.pk/)”