Performance analysis of mutual funds industry in Pakistan

Abstract

The purpose of this study is to evaluate the "Performance analysis of mutual fund industry in Pakistan", to achieve this objective we evaluate the performance of 5 closed-ended mutual funds by using shape ratio, information ratio, Jensen ratio, Treynor ratio and Sortino ratio, The results of this study is beneficial for the investors and analyst for selecting the right combination of funds that meets the need and expectations of the desired return. Results of this study show the PICIC energy have the positive values and the reaming selected funds shows the negative value. Positive values of PI CIC energy fund represent that we have the desired results and achieve our objective. The Results of PICIC Energy fund is compared with the industry and the positive values of PICIC energy fund indicate that PICIC energy fund outperformed the industry by having positive values and other mutual funds in industry failed to produce desired results, this study also provide us with an additional information that the negative values of other funds we have selected are not well diversified, managers while selecting securities for the investor have to consider that diversification effect, because a well-diversified portfolio can only minimize the risk of portfolio and can able to secure the valuable money of the investor In this rapid world changing environment, it has been very essential for the mutual finds industry in Pakistan to develop new ways or to bring changes in the existing system of mutual funds to keep the pace with modern world challenges. Mutual Funds industry in Pakistan should have to develop different strategies to face modern world challenges through and utilize their potential to pursue existing opportunities in those areas where they have limited or no access, to become a leader mutual fund industry in Pakistan have to provide the best facilities and services to its investors by providing them confidence on their investments and meets this need and expectations in the form of value able monetary value. Mutual fund industry in Pakistan has to take the concrete steps to overcome their weaknesses and develop the strategies to strengthen the market for international investors as well, in the end we recommended several ides for companies which existing companies has to adopt to strengthen the mutual fund industry in Pakistan.