THE FACTORS THAT AFFECTS THE RATE OF RETURNS OF AMCS IN PAKISTAN
Abstract
This study investigates factors that affect the rate of returns of AMCs in Pakistan. For this, four major types of Mutual funds were selected, and the effect of four macro-specific variables on their returns were investigated by using unstructured interviews, developing and comparing the effect of the factors in different categories of funds & for different classes of funds. Results showed that the factors positively impacting the rate of return are GDP Growth, Saving, Consumption & investment of the economy, along with Fund Size and the characteristics of the Money Market. Some variables have no impact on the rate of returns, i.e. Liquidity, Asset Turnover and Management Fees. This study figured out that Inflation and front-end load have a negative impact on the rate of returns of AMCs. The characteristics of equity fund impact have challenging to analyze with the rate of return because the relation of fund returns mostly depends on the fundamental of the stock market. However, macroeconomic factors affect the fund market or any specific class of funds.
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