NBP Fullerton Asset Management (NAFA), a subsidiary of National Bank of Pakistan is set to launch an Islamic capital-protected fund within the next two months, SRP has confirmed.
NAFA will be the second Pakistani asset management company (AMC) to launch an Islamic capital-protected fund and is aiming to structure a product with a two-year term which invests in only Shari'ah-compliant securities.
The fund manager's chief executive, Amjad Waheed, told SRP that the market for Shari'ah-compliant products is still largely untapped, stressing that while the concept of Islamic capital-protected funds may not have kicked off in Pakistan yet there is increasing demand for conventional funds with capital protection.
NAFA's launch will represent the fourth Pakistani AMC to enter the domestic conventional capital-protected fund market. Al Meezan Investment Management entered this arena in Pakistan in 2008 and issued the first Islamic capital-protected fund in 2011.
In the same year, fund house UBL Fund Managers issued a capital-protected structure linked to the Karachi Stock Exchange, while JS Investments reported the maturity of a capital-protected fund after 3.5 years which paid out 27.45%.
Waheed expects the new fund to capitalise on the fact that NAFA is a subsidiary of the National Bank of Pakistan (NBP).
"[This] certainly increases our credibility," said Waheed. "The bank's name gives people comfort that their fund manager won't run away with their money ... that discipline will be observed in a bank-owned asset management company."
NBP has a 54% stake in NAFA while stakes held by Fullerton Fund Management and Waheed stand at 36% and 10%, respectively.
According to the Mutual Funds Association of Pakistan, NAFA currently manages assets worth PKR46bn ($432m), after an increase of 50.8% in assets under management in the last three years from PKR13.4bn ($126.5m) recorded in June 2010.