By Structure
Open-ended schemes: An Open-end Fund is one that is available for subscription all through the year. These do not have a fixed maturity. Investors can conveniently buy and sell units of the Funds from the Asset Management Company (AMC) at the related prices commonly known as Net Asset Value (“NAV”).
Close-ended schemes: A Close-ended Fund is open for subscription only during a specified period. Investors can invest in the scheme at the time of the initial public issue and thereafter they can buy or sell the units of the scheme on the Stock Exchanges where they are listed.
786 Investments manages open-ended schemes categorized into following Investment Objectives:
1. Income schemes: The aim of Income Funds is to provide regular and steady income to investors. Such schemes generally invest in fixed income securities such as bonds, TFCs, corporate debentures and Government securities. Income Funds aim to provide capital stability and regular income. These are considered low risk schemes.
2. Asset Allocation Schemes: The objective of Asset Allocation Funds is to generate regular income by investing in Debt & Money Market securities and to earn capital appreciation by investing in equity and equity related securities. Investment guidelines of this scheme are flexible to maximize the upside and protect the downside of the capital market movements.
3. Balanced schemes: The aim of Balanced Funds is to provide both growth and regular income. Such schemes invest both in equities and fixed income securities in the proportion indicated in their offering documents. These are ideal for investors looking for a combination of income and moderate growth. These are considered medium-risk schemes.
- Professional Management
- Better return than conventional investment avenues
- Diversification
- Tax Benefit
- Liquidity
- One window operation
- Regular income stream
| CATEGORY OF SCHEMES | |||
| DETAILS OF INVESTMENTS | Income | Balanced | Asset Allocation |
| Cash/T-Bills less than 90 days maturity | 25%-100% | 10%-70% | 10-100% |
| Govt. Securities/ TDRs / Money Market Placements including COD/ COM/ Reverse Repo, Commercial Paper | 0% – 75% | 0% – 60% | 0-90% |
| CFS/ spread transactions | 0% – 40% | 0% – 25% | 0-40% |
| TFCs/ Sukuks | 0% – 75% | 0% – 60% | 0-90% |
| Listed Equities | No | 30%-70% | 0-90% |
| Minimum Credit Rating Instrument | BBB- | A- | BBB- |
| Minimum Credit Rating Bank/ DFI | BBB- | AA- | BBB- |
| Minimum Credit Rating NBFC/ Modarba | BBB- | AA | BBB- |
| Time to Maturity of a single asset | No limit on time to maturity | Not Applicable | No limit on time to maturity |
| Weighted Average Time to Maturity of Fund | Max 4 years excluding Govt Securities | Max 2 years (of non-equity assets) | Max 4 years excluding Govt. Securities (of non-equity assets) |
| Sr. No. | Name | Type | Launch Date |
| 1 | Dawood Income Fund (DIF) | Income Fund | May 19, 2003 |
| 2 | Dawood Islamic Fund (DIF-S) | Asset Allocation | July 14, 2007 |
| 3 | First Dawood Mutual Fund (FDMF) | Balanced Fund | March 22, 2005 |
Bank deposit |
Investment in Income Fund |
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| Return | Return is low on current & savings deposits and is relatively high on term deposits. | Return is the same for all investors whether they invest for a short or a longer period. This return is usually better than comparable bank deposits. |
| Income Tax | Profit earned on bank deposits is subject to income tax. Withholding Tax @ 10% of the profit is deducted by the bank at the time of crediting the profit in your bank account for filers and 17.5% for non-filers. | Return on investment in Mutual Fund comes in the form of capital gain (change in the value of the units purchased) which is subject to Capital Gains Tax (CGT) and dividends. For individuals, withholding tax @10% is applicable. |
| Tax benefit | No entitlement for tax credit. | Tax credit is available subject to limits in Income tax Ordinance, 2001. |
| Withdrawal of funds | You can withdraw your money from a bank generally on the same day in a current/savings account, but you may have to pay a penalty if you withdraw funds from a term deposit. | Investment in Income Fund can be withdrawn at any time you wish and there is no penalty. The money is transferred in your designated bank account generally in 2-3 days. |
Tax credits on investment is available on securities listed on stock exchange, listed funds are treated as listed securities and eligible for the credit and section 62 of Income Tax Ordinance 2001.
- Capital Gains Tax (CGT) rate for individual is 10% for holding period up to four years. For NISF and NSF CGT rate for individuals is 12.5% for holding period up to four years if dividend receipt of the Fund are less than capital gain For holding period of more than 4 years CGT is exempt.
- Tax rate on dividends for individuals is 10%. For NISF and NSF Tax rate on dividends for individuals is 12.5% if dividend receipt of the Fund are less than capital gain
In case of growth unit, the investment remains in the Fund until the investor submits a redemption form to encash part or whole of the investment.
In case of income unit, the investor opts to withdraw a certain amount at regular intervals. Income unit has two types i.e. Fixed Income Unit and Flexible Income Unit:
In case of Fixed Income Unit, the investor specifies a fixed amount to be redeemed and transferred in the investor’s bank account at regular intervals. (In case the amount of redemption exceeds the increase in investment value during each interval, the principal investment invested by the investor may deplete.)
In case of Flexible Income Unit, the investor authorizes the Management Company to redeem and transfer in the investor’s bank account, an amount equal to the increase in the investment value during each interval.
