Mutual funds in Pakistan have gain its popularity in the last two decades. With major population living below poverty line as in accordance to international standards, there is a lot of potential in converting national saving into more risk oriented investment. NIT as one of the oldest mutual fund company of the company has proven to be the best in the country in producing best results and has attracted close to PKR 90 Billion from the banks into dynamically managed portfolio. Due to its backing by national leading financial institutions it has cutting edge over other new mutual funds. .

July 5th, 2007 -National Investment Trust (NIT), one of the oldest and most reliable open-ended mutual funds has declared record dividend of PKR 6.20/  per unit. NIT's single fund is well-known in the country for its capital plus dividend gains. At present NIT is operating at PKR 61/-(BUYING) and 60/- selling per unit
 

Understanding Risk associated with Mutual Funds
Risk is associated with any investment and its understanding makes the investor more conscious and more relaxed while invested hard earned money. Before picking any mutual fund, one must consider following factors Mutual funds in Pakistan, Mutual funds industry, asset management companies, NIT Pakistan

Type of Funds

• Growth Fund

• Income Funds

• Islamic Funds

• Balanced Funds

• Money Market Funds

• Sector Funds

• Specialized Funds

Portfolio of Fund Manager
Understanding asset allocation of your fund manager gives you edge to relax and let the fund manager take the pain. Usually, funds are allocated according to its type and ‘higher the risk higher the reward’ is underlining factor while deciding the investment approach. Growth funds are usually invested in long term steady stocks or treasury bills whereas income funds are allocated more towards money markets or aggressive growth funds.  

Interest Rate Fluctuations Vs Mutual Funds
Increase in interest rates signifies decrease in fund’s earnings and vice versa. Circulation of money towards money market indicates less of demand for stocks/bonds. Since mutual funds based on the factor of Net Asset Value (NAV), a day of adverse fluctuation in interest rates can cause significant damage in NAV of the day.

R-Square Factor
The factor signifies degree of risk in relation with diversification of the fund’s investment.
 

Beta (β)
Beta (β) is funds risk to overall market situation

Theory of Optimal Returns of Mutual Funds
Economists have developed theory to understand risk measured using standard deviation against the return. Its curve is also called 'The efficient Frontier' in different books but practical implementation of the theory is not precisely possible due to different underlining factors. .