An investment is an asset or item purchased with the expectation that it will generate income or appreciation in the future. Investing has become essential due to the following reasons:
There are a variety of investment structures that aim to improve, safeguard, or optimize the performance and returns of the following primary asset classes:
A financial product that allows investors to pool their money and use it to buy stocks, bonds, money market instruments, and other assets.
Mutual funds have been a popular investment option for investors since their inception. The following is a list of their other characteristics and ease of usage.
Expertise in Management: Selecting mutual funds entails selecting a competent money manager as well. You have a money manager who can do the legwork for you, saving you the trouble of having to thoroughly investigate and evaluate every investment. These knowledgeable fund managers work for AMC and conduct extensive due diligence before selecting an investment for the mutual fund or keeping track of the assets’ performance.
Investment diversification can be effortlessly attained, regardless of investment amount, by investing through mutual funds. A mutual fund’s assets are dispersed over several businesses and industries, reducing the chance of losing money as a result of a certain business or area performing poorly.
Affordability: Small investors with modest investment capital can also utilize mutual funds as an investing vehicle.
Liquidity: The majority of funds nowadays are established with an open-end structure, allowing fund investors to promptly withdraw their capital.
Transparency: Investors may easily compare mutual funds with one another because of the thorough reviews and ratings that numerous newspapers and rating agencies give each fund’s performance. You receive regular updates as a unit holder, such as daily NAVs, along with details on the holdings of the fund and the strategy of the fund manager.
Entry and/or exit fees are frequently assessed by mutual funds. Another name for this is sales loads. The AMC markets the fund and pays distribution expenses with the proceeds from these charges and loads.
Investors are charged a fee known as front-end load when they buy units.
A mutual fund’s governing documents are as follows:
Document of trust
The mutual fund’s AMC and trustee enter into a trust deed as the primary document for the fund’s formation and management. All parties involved must diligently fulfill their duties as outlined in the trust deed, which includes the Asset Management Company and the trustees.
Document for Offering
A mutual fund’s offering document is an extensive document that addresses, among other things:
The Income Tax Ordinance, 2001 states that the rates for capital gain taxation are laid out in Division VII of Part 1 of the First Schedule of the Income Tax Ordinance, 2001. These rates apply to the sale or redemption of assets, including mutual funds.When securities are redeemed by a mutual fund, collective investment plan, or real estate investment trust (REIT), the following rates of capital gains tax need to be deducted:
Category Application Rate One-on-One and Group (AOP)
Ten percent for stock funds and ten percent for all other types of Funds
Company
10% of the investmentsOne-quarter of the Assets
Additionally, if a stock fund’s dividends are lower than its capital gains, the tax deduction rate will be 12.5%. Additionally, if the security is held for more than four years, no deduction for capital gains tax will be made. Furthermore, if an individual incurs a loss while selling securities within a given tax year, such loss can only be offset against the gain from other securities that are subject to taxation under this section; it cannot be carried over to the next tax year.
OS Capital Investments provides its investors with a user-friendly online platform where they can easily track their investments. If they need more information, they can also reach out to their salespeople. Additionally, investors can view their portfolio summary anytime they want by downloading the mobile app.
To get prompt answers to your questions, get in touch with our Customer Support Relations team at Pk:+923330105502
email at https://os-commodities.com
How to decide which mutual funds I should invest in?
You should talk to one of our sales representatives and brief them about your needs as to why you are investing in the mutual funds. After familiarizing yourself with the many funds offered by OS Capital Investments, he or she will assess your situation and advise you on the most appropriate fund, or funds, to help you reach your financial objectives.
A “Prospectus” or a “Offering Document” is a legal document that is required, filed, and approved by the Securities & Exchange Commission of Pakistan (SECP) giving details about an investment offering to the public. The document provides a wealth of pertinent information regarding the investment security or mutual fund, which can assist potential investors in making more informed investment decisions.
The investment objectives and constraints of each fund are distinct, and they operate within the confines of their respective offering documents.
A mutual fund’s prospectus typically includes the following: Investment Objectives, Investment Restrictions, Risk Disclosure, Trustee, Board of Directors and Management, Expenses of the Management Company and the Trustee, Financial Reporting, and so forth.
A confirmation email and/or text message will be sent to you once you make an investment.
The cut-off time for investing in OS Capital Investments funds is 9:00 am to 5:00 pm from Monday till Friday. Any future modification in timings shall be timely disclosed to investors via email and SMS.
Indeed, in order to be eligible for their tax-exempt status, Mutual Funds that have been approved by the [Securities and Exchanges commission of Pakistan] and established by the Investment Corporation of Pakistan must have at least 90% public ownership of their certificates at the end of each year and distribute at least 90% of their income to those certificates.
It is only possible to invest in Pakistan Rupees (PKR).
Our mobile app allows you to conveniently track your investments while on the move. The concept of the time value of money states that money available in the present is more valuable than the same amount in the future, because it has the potential to earn interest. This fundamental principle in finance asserts that any sum of money is worth more when received sooner, as long as it can generate returns.
The likelihood of an unfavorable outcome is what the word “risk” usually denotes. The potential for negative swings in value and return is the risk factor that worries investors. The many forms of danger that could befall certain investments are as follows:
The possibility that the portfolio’s value would fall is known as market risk, and it affects all mutual funds. Economic and market factors, interest rate and currency volatility, and regional and worldwide market instability are the usual culprits of price fluctuations.
An investment’s value might be impacted by changes in interest rates because all the instruments in a mutual fund are marked to market every day. Securities owned will see an increase in value due to the decline in interest rates.
The possibility that future cash flows from an investment may have less buying power as a result of inflation is known as inflation risk. Security prices could fall if investors face the danger of their money losing purchasing power or if interest rates rise throughout the investment period.
Risks associated with fluctuations in the value of one currency relative to another are known as currency risks. Variable foreign exchange rates pose a risk of loss for investors who have exposure to foreign currency or investments transacted in foreign currency.
The danger of an investment becoming unsellable or otherwise difficult to acquire rapidly is known as liquidity risk.
Mutual funds are categorized into two main types:
Mutual Funds with a Set End Date: An initial public offering (IPO) is a common way for publicly listed investment companies to acquire a set amount of capital, and closed-end funds are no exception. The next step is to structure, list, and trade the fund on a stock exchange just like a stock.
One sort of mutual fund is the open-end fund: which can issue as many shares as the management team sees fit. The number of investors has no bearing on the fund’s ability to issue shares if demand is sufficient. If investors in an open-end fund want to sell their shares, the fund can buy them back.
The net asset value per share (NAV), which represents the value of a mutual fund unit, is computed by dividing the net asset value of assets by the total number of issued and outstanding units. The NAV-related pricing is used to purchase and sell funds.
Redemption: Account holders may realize their gains by redeeming or selling their units to the asset manager.
Capital gains on investments are subject to taxation based on the duration of the investment.
Dividend: The Asset Management Company declares a payoff to the unit holder from its periodical earnings. Cash dividend payouts are subject to withholding tax in accordance with the Income Tax Ordinance, 2001.
The statutes that regulate the formation of mutual funds are as follows:
“Regulations” refers to the 2008 Non-Banking Finance Companies and Notified Entities Act.
Such documents as the Companies Ordinance, 1984 (the Ordinance) and the SECP’s circulars and directives issued in accordance with the Ordinance’s requirements.
The value per unit of a fund is represented by its Net Asset Value (NAV). The net asset value (NAV) of a fund is calculated by dividing the market value of its assets (before taxes and other obligations) by the number of units that investors have access to at the moment.
An entity’s net asset value (NAV) is its worth after deducting all of its obligations from its total assets. It is then divided by the total number of units issued to investors to get the net value.
Because of the “Sales Load (Front End)” or the “Sales Load (Back End),” the units’ offer and redemption prices could differ from the published NAV.
On a daily basis, the OS Capital Investments website updates its investors with these prices and the NAV.
If you are a Muslim resident Pakistani unit holder and also a Sahib-e-Nisab (persons liable to Zakat), then you will be required to deduct 2.5% of the face value or NAV, whichever is less, from your dividend or redemption payments. However, if you are exempt from this requirement, you can avoid this deduction by submitting a Zakat Exemption Declaration Form (CZ-50) or Zakat Affidavit to the company.
No, it is not. Mutual funds, in contrast to investing directly in stocks or shares in the stock market, pool money from a group of investors and invest it in a variety of investment avenues and securities, including stocks, bonds, money market instruments, and government securities, to name a few. Each fund has a unique investment objective and constraints regarding the placement of the pooled money, and they operate within the boundaries established by their respective offering documents. By investing in a mutual fund, an investor can enjoy a variety of benefits, including diversification, lower costs, and convenience.
An investor pays the Offer Price when purchasing a single unit of a mutual fund. This price is equivalent to the NAV per unit plus the applicable Sales Load (Front End) load. Redemption Price is the price that an investor gets when he sells his units to the fund and is equivalent to the NAV minus Sales Load (Back End) along with any redemption charges.
You can reach us at https://oscapitalinvestments.com or +923330105502 to speak with a customer service representative about your desired account statement. We will send it to you via mail or email, depending on your preference. Alternatively, you can ask your designated salesperson to receive it. Typically, investors can choose to receive their statements monthly or every six months, whichever works best for them.
Every month, the fund’s managers compile a report called a Fund Manager Report (FMR) that summarizes the fund’s activities and performance for that specific month. It is displayed on the firm website for the investors to measure and track the performance of the funds they have invested their money in. Prospective investors can also use it to help them choose an investment opportunity.
If a mutual fund outperforms its benchmark, it is said to have “outperformed” the benchmark; conversely, if a fund underperformed its benchmark, it is said to have “underperformed” the benchmark. The KSE-100 or KSE-30 is a common benchmark for conventional funds, while the KMI-30 is used for Islamic funds.
Withholding from mutual fund dividends is 15% for all investors (except insurance companies and banks). For further details and explanations, see Division III of the First Schedule of the Income Tax Ordinance, 2001.
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