Investment Alternatives in Pakistan: Historical Performance and Future Outlook
May 30, 2014
Happening Now
Dr. Amjad Waheed, CFA, Chief Executive, NBP Fullerton Asset Management Ltd (NAFA)
NAFA has carried out a study with the objective to provide a framework for managing investments. The study recommends use of Modern Portfolio Theory and strategic asset allocation process to investment decisions on the basis of a three-dimensional view of the risk, return, and the correlation among asset classes. In our study, we have calculated the performance of five key asset classes from January 2001 to December 2013. The results reveal that the Capital Protected Strategy has the highest Sharpe Ratio. Thus, if an investor wants to earn a return reasonably higher than inflation, while reducing the risk at the same time, Capital Protected Strategy is the best available option. We further identify that the Optimal Portfolio that offered the highest excess return per unit of risk over the 2001-2013 period comprised of 4% investment in PIBs, 27% in Special Savings Certificates, and 69% in Capital Protected Strategy. This portfolio offered nominal return of 13.3% p.a. with annualized standard deviation of 5.8%, which resulted into maximum Sharpe ratio.
Dr. Amjad Waheed holds a doctorate in Investments & Finance from Southern Illinois University, USA and is also a Chartered Financial Analyst. For the last 8 years he is CEO of NBP Fullerton Asset Management Ltd (NAFA), which is a subsidiary of National Bank of Pakistan, with Fullerton Fund Management Company of Singapore as the other joint venture partner. NAFA is presently managing eighteen mutual and pension funds, and several portfolios. Total assets under management of NAFA are presently about Rs 45 billion. NAFA is among the largest Asset Management Companies in Pakistan today. Before joining NAFA, Dr. Amjad was Head of Equity Mutual Funds & Portfolios at Riyad Bank, Saudi Arabia, for about 5 years where he was managing US$ 7.5 billion invested in 22 mutual funds. Prior to that Dr. Amjad was Head of Investments at NIT, and Chief Operation Officer of FC-ABN AMRO Equities for several years. Before moving back to Pakistan, Dr. Waheed was Assistant Professor of Finance at Tennessee State University, USA. He has published several articles in top journals of the world such as Journal of Banking & Finance and Financial and Financial Management. Dr. Amjad has served on the Board of various companies including Siemens, Nishat Mills, PICIC, Askari Bank, Millat Tractors, Fauji Fertilizer, Pakitstan Tobacco Company, Treet Corporation, Gul Ahmed Textile, Bata Pakistan.
Labels: Annual Conference, Managing Business in Pakistan, Research
posted by S A J Shirazi @ 5/30/2014 09:22:00 AM,
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