Mutual Funds – FAQ’s
1.
What is a Mutual Fund?
A Mutual Fund is a scheme which pools the savings of people and invests it in a diversified portfolio of securities such as stocks and fixed-income instruments and distributes the return generated through the investment among the investors.
2.
What is the difference between a Savings account and an Investment in Mutual Funds?
Mutual Funds are a pooled investment. Asset Management Companies (AMC) manage the fund and pass the profit to its investors on a daily basis after adjusting the applicable fees. Hence, the returns are not guaranteed and are based on the fund’s performance. On the other hand, bank deposits
(Savings, Term deposits) are generally safe as the customer is aware of the returns based on the deposit account’s specific product features.
3.
Are mutual funds a safe investment?
All investments in Mutual Funds are subject to market risks. The Net Asset Value (NAV) of units may go up or down based on market conditions. The investors are advised in their own interest to carefully read the contents of funds offering document, in particular the Investment Policies, Risk
Factors and Warnings before making any investment decision.
Product literature is issued for indicative and information purposes only and an investor should make his/her own appraisal of the investment opportunity and consult his/her own financial, legal, taxation and other professional advisors prior to any subscriptions.
4.
Are returns guaranteed in Mutual Funds?
No, Mutual Funds earn returns on a daily basis and pass the same to its investors, hence the returns are not guaranteed, and will be subject to the fund’s performance. The volatility in return largely depends on the category of the Mutual Fund. For example, returns on money market Mutual Funds show very low volatility. Returns on fixed income Mutual Funds show low to medium volatility.
Return on equity Mutual Funds show high volatility.
All investments in Mutual Funds (unit trusts) are subject to market risks. The NAV based prices of units and dividends/returns thereon are dependent on forces and factors affecting the capital markets. These may go up or down based on market conditions. Past performance is not necessarily indicative of future results.
5.
What are the advantages of investing in open ended Mutual Funds?

Tax Credit: Salaried and non salaried individual investors can earn tax credit benefit.

Transparency: No hidden costs. Updates on the value of units, investments made by the Mutual
Fund and the fund manager's strategy and outlook available through Fund Manager’s Report.

Low Cost: When compared to direct investments in the capital market, mutual funds cost less.

Liquidity: Units may be redeemed (in full or part) within maximum of 6 working days.

Mutual Funds – FAQ’s

Professional Management: Qualified Professional Fund Managers looking after investments.

Diversification: Diversified portfolio investing in different asset classes across various sectors and securities.

Convenience: Easy investment and redemption process. Other facilities include: Automatic
Reinvestment and Periodic Distribution of earnings.
6.
What is PICIC Asset Management Company (PICIC AMC)?
PICIC Asset Management Company Limited (PICIC AMC) is a wholly owned subsidiary of NIB Bank
Limited. PICIC AMC is registered as a Non-Banking Finance Company (NBFC) licensed by the Securities and Exchange Commission of Pakistan to provide Asset Management and Investment Advisory services.
What is the Role of NIB Bank?
PICIC Asset Management Company is the manager of PICIC Funds and NIB Bank Limited (NIB) is only the
“Distributor” of these funds. NIB shall not be held responsible in any manner whatsoever to any person, including but not limited to, the customer(s), beneficiary or any third party with respect to the performance of the funds.
7.
What is PICIC-Income Fund?

PICIC Income Fund is an open-ended, perpetual, mutual fund. It is not a Savings account or a
Term Deposit.

PICIC Income Fund invests in various medium to long term fixed income instruments (T-Bills,
PIBs, Bank Deposits, TFCs etc.) offering low to medium risk and volatility to investors seeking greater investment potentials. The fund has no direct exposure to stock market. Please refer to clause 2.3 of the Offering Document for a detailed list of Authorized Investments.

The objective of PICIC income Fund is to provide competitive returns to its investors through active investments in a blend of short, medium and long term debt instruments. The Fund aims to preserve capital while maximizing returns through efficient utilization of investment and liquidity management tools. However, there is no capital preservation guaranteed by the fund manager.
8.
What is PICIC-Cash Fund?

PICIC Cash Fund is an open-ended, perpetual, mutual fund. It is not a Savings account or a Term
Deposit.

PICIC Cash Fund invests in Pakistan’s Money Market i.e. Short term fixed income instruments, bank deposits and Government Securities (T-Bills, PIBs etc.). It does not invest in equity instruments or Term Finance Certificates (TFCs). Please refer to clause 2.3 of the Offering
Document for a detailed list of Authorized Investments.

Mutual Funds – FAQ’s

The objective of PICIC Cash Fund is to provide competitive returns to its investors through active investments in low risk portfolio of short term duration, while maintaining high liquidity.
However, there is no capital preservation guaranteed by the fund manager.
9.
How to purchase PICIC Income and PICIC Cash Fund?
A.
Purchase Request
All NIB customers can purchase PICIC Income fund and PICIC Cash Fund by simply visiting the following branches where our Relationship Managers will assist you.
The Designated NIB Branches are:
Branch Name
Razia Sharif
City
Islamabad
Address
NIB Bank, Razia Sharif Branch, Blue Area Islamabad
Post Mall
Gulberg III
DHA. Z
NIB House
26 th
Street
Kulsoom Court
Khayaban-e-Shahbaz
Islamabad
Lahore
Lahore
NIB Bank, Post Mall Branch, F 7, Markaz Islamabad
NIB Bank, 70 E 1, Hali Road, Gulberg III, Lahore.
NIB Bank, 38 Z, Commercial Area, Phase III, DHA Lahore.
Lahore NIB House, Old Race Course branch, Aiwan E Tijarat Raod,
Karachi
China Chowk, Lahore
NIB Bank, 42 C, Sun Centre,26 th
Street, Tuheed
Commercial Area, DHA Phase V, Karachi
Karachi
Karachi
NIB Bank, Kulsoom Court, Near Della Wala, Building,
Clifton, Karachi.
NIB Bank, Khyaban E Shahbaz Branch, DHA, Phase VI,
Karachi
B.
How long the redemption process takes?
Maximum Six Business Days.
10.
How do I know the status or position of my investment in PICIC Funds?
The fund will have a daily Net Asset Value “NAV” that would be made available in leading newspapers, at PICIC Asset Management Company’s website www.
picicamc .com and Mutual Funds
Association of Pakistan (MUFAP) website www.mufap.com.pk.
A transaction confirmation is issued on each unit transaction by PICIC AMC. This includes purchase of units, redemption of units, transfer of units etc. Additionally, an account statement is issued periodically.
11.
How long do I need to hold my units?
There is no lock-in period. Investments can be redeemed at any time by filling a redemption form.
However, based on the fund’s investment objective, the suitable period for investment varies. For example, PICIC Cash fund is suitable for an investment over a 3 month period.
PICIC Income Fund’s fund is suitable for an investment term over a 6 month period.
12.
What is the Front End Load?

Mutual Funds – FAQ’s
Open-end funds usually recover a sales charge (called front end load) from unit holders when investors purchase the units. It is included in the Fund’s Offer price and charged at the time of subscription i.e. Offer price= NAV + Front-end Load.
13.
Is there any front end or back end load in PICIC AMC Open Ended funds?
Fund Name Front End Load Back end Load
PICIC-IF
PICIC-CF on Class D units (1.25% of NAV) on Class D units (1% of NAV)
Nil
Nil
14.
Are there any bank’s charges for purchasing Mutual Funds?
No, the above charges i.e. Front End Load and Management Fee are being charged by the Asset
Management Company (PICIC AMC). There are no bank’s Charges for purchasing mutual funds.
15.
How much is the management Fee of PICIC AMC Open Ended funds?
Fund Name Management Fee
PICIC-IF
PICIC-CF
1.25%
1.00%
16.
What is an Offering Document?
It is a legal document that contains detailed information about the mutual fund's objectives, services, investment guidelines and fee & expense structure. It is in the interest of an investor to read and understand the Offering Document before making any investment Decision, especially clauses related to authorized investment, risk disclosure and warnings.