FAQs - General
1) Why invest in a Mutual Fund?
Mutual Funds are a popular way to enhance growth and reduce risk. Depending on your objectives and the amount of risk you’re willing to accept, our investment representative can help you select the fund that best meets your needs.
2) What information must I receive before buying mutual funds in general and Atlas Funds in particular?
Atlas Funds provide the copy of prospectus/offering document and latest annual or quarterly financial reports to its investors before accepting their initial investment. In addition, monthly Fund Managers’ reports are available on web-site. The purpose is to provide the complete disclosure of information about the fund. Information listed in the prospectus includes the following:
The objective: This allows you to find a fund that matches your investing objective.
Performance: This describes how the fund has performed in the past. Since the funds may change managers or limit choices to particular sectors of the economy, past performance does not guarantee future success.
Risk: Each fund must list the level of risk involved in achieving its objectives.
3) How does a fund produce income for the investors?
When a fund invests in debt, it requires interest payments at specific times. A fund investing in the stock of corporation receives whatever cash dividends that company pays. Interest payments and dividend income by law must be passed through to the fund’s shareholders i.e. to you. You can even have that income reinvested in more fund shares. Also, when a fund actually sells a stock or bond that has increased in value, the fund realizes a capital gain. Periodically, the fund will distribute such gains to its shareholders in the form of dividend warrants unless you have instructed it to reinvest the gains.
4) How do I find out how my mutual fund is performing?
By contacting our representative in the investor services division. Also, the value of securities a mutual fund holds is computed every day and made publicly available. You can get that value by looking it up in daily newspapers.
5) Is my principal protected?
Unlike a bank deposit, the value of your principal can rise or fall. People invest in mutual funds because of the fact they want their principal to rise over time. The value of a fund depends on the value of the securities it owns. Stocks and bonds fluctuate in value and therefore so do mutual funds.
FAQs - Atlas Pension
Section 1 - Pension Funds / Plans in General
1) What is a pension fund?
Pension fund is a pool of assets forming a separate legal entity that is created with a sum of money set aside at regular intervals over the working life of a Participant and invested for capital growth and to provide a regular income after retirement to maintain a reasonable standard of living.
2) What are different types of pension plans?
Pension plans can be divided into two broad types:
Defined Benefit Plans:
These are employer-sponsored retirement plans, provided to employees who have served the employer for a minimum number of qualifying years. The pension amount is determined based on factors such as last drawn salary, and duration of employment. It is the responsibility or discretion of the employer to create the fund to meet the pension liability and to invest it.
Defined Contribution Plans: A retirement plan where the final benefit is determined according to the amount contributed in the pension/ retirement fund over time by the employee and / or employer (if any); the income derived from the investment; and appreciation in the value of underlying securities.
Section 2 - Atlas Pensions
9) Can I change my Allocation Scheme?
A participant can change from one Allocation Scheme to another Allocation Scheme twice in a financial year.
10) How much risk should I take with my money?
Before deciding which Allocation Scheme to select to invest in, the Participants should consider the types of funds and level of risk involved. To help them choose an investment mix to suit their specific needs, the Allocation Schemes have been graded into risk bands – lower risk, lower to medium risk, medium to higher risk and higher risk. Furthermore, for pension investment, it is important to take into account the perceived risk that suits each stage in the working life. Different risk profiles may be appropriate at different stages of the Participant’s working life.
Expected Risk Profile
Expected Return Profile
|High Volatility Allocation Scheme
Medium Volatility Allocation Scheme
Low Volatility Allocation Scheme
Lower Volatility Allocation Scheme
Lifecycle Allocation Scheme
Medium to High Risk
Lower to Medium Risk
|Investors with long term investment horizon and/or high tolerance for risk.|
|Customized Allocation Scheme||Higher in early years and lower in later years
Dependent on the percentage selected within the given range.
Medium to High Return
Lower to Medium Return
Participant should also consider that the effect of inflation would reduce the buying power in the future of his/her pension. If investment returns are sufficiently low, inflation could cancel the returns that the Individual makes on his/her pension investment. The risk is particularly relevant to lower risk funds that invest in fixed interest and cash, because they have no protection against inflation, as provided by equity investments.
AAML can help you determine the asset allocation, which is suitable for you. Please telephone us and our representative will call on you.
11) When can Participants receive their Account Statement?
A six monthly Account Statement for the half years ending December 31 and June 30 shall be sent to the Participants in the month immediately succeeding these periods. It shall be a personalized statement for the Participants, having the following minimum information:
- The number of Units allocated
- Current valuation of the Units in the Individual Pension Account as of that date
- Participant’s aggregated transactions for that six month period including the types of Contributions received; and
- Details of benefit disbursements: retirement along with the taxes withheld, if any or other withdrawals if any.
It is important that the Participant updates the Pension Fund Manager about any change in address or other particulars on timely basis. In addition to six months account statement, every participant shall also receive an account statement on every contribution, within a week of receipt. It shall also serve as receipt of contribution. However, in case of contribution received through employers, an acknowledgement receipt is sent to the employer in line with Rule 13 (3) of Voluntary Pension System Rules 2005.
Section 3 - Retirement
2) What are the options available to the Participant’s nominees in case of death of Participant?
Following are the options available to the nominees:
- Withdraw his/her share of the amount subject to the conditions laid down in the Income Tax Ordinance; 2001 (XLIX of 2001);
- Transfer his/her share of the amount into his existing or new Individual Pension Account to be opened with the pension fund manager, according to the Voluntary Pension System (VPS) Rules;
- Use his/her share of the amount to purchase an Approved Annuity Plan on his/her life from a Life Insurance Company, only if the age of the survivor is fifty five years or more; or
- Use his/her share of the amount to purchase a deferred Approved Annuity Plan on his life from a Life Insurance Company to commence at age fifty five years or later.
If any amount in excess of the allowable amount is withdrawn as cash by the nominees, then tax will be deducted before making any such payments.
3) What is the procedure for redemption of Units in the event of death of the Participant?
Step 1: The Units shall be redeemed on the Dealing Day on which the intimation of death of Participant is received in writing (or through such means as approved by the Commission) and transferred to the Individual Pension Account of the deceased Participant in the lower volatility scheme offered by the Pension Fund Manager.
Step 2: The total amount in the Individual Pension Account of the deceased Participant, shall be divided among the nominated survivor(s) according to the percentages specified in the nomination form or succession certificate issued by a court of competent jurisdiction.
Each of the nominee(s) shall then have the following options, namely:
- Withdraw his/her share of the amount subject to the conditions laid down in the Income Tax Ordinance, 2001;
- Transfer his/her share of the amount into his/her existing or new individual pension account or income payment plan account to be opened with a Pension Fund Manager, according to VPS Rules, 2005;
- Use his/her share of the amount to purchase an annuity/deferred annuity on his life as provided in the VPS Rules, 2005, from a Life Insurance Company.
If any amount in excess of the allowable amount is withdrawn as cash by the nominee(s), then tax will be deducted before making payments.