Al Meezan Mutual Fund converted into an Open-end fund

Al Meezan Mutual Fund (AMMF) – the closed-end equity fund managed by Al Meezan Investment Management Ltd (Al Meezan) since 1995 has now been converted into an open-end equity fund with effect from August 5, 2011. The fund has provided a cumulative return of 883 per cent since its inception till June 30, 2011 with return of 16.45 per cent on an annualised basis. As an investor in AMMF your initial investment of Rs100,000 has increased to Rs983,000 (on NAV basis) as at June 30, 2011.
In this regard, Al Meezan has completed all regulatory and statutory formalities of the conversion process. On the basis of swap ratio of 1:1, the existing share holders of the closed-end fund would receive one unit of open-end fund in lieu of one share held of the closed- end entity. The conversion will protect investors’ interest by providing them the following benefits. Investors would be able to buy and sell units at price based on the net asset value of the fund instead of discounted market price of the shares quoted on the stock exchange. Investors will have the opportunity to increase their investment in the fund whereas they are unable to do so in case of a closed-end structure.
After the conversion, investors will have the ability to redeem the units with Al Meezan anytime they want to, instead of going to the stock market and looking for a buyer of shares of the fund, thus providing greater liquidity. The Board of Directors’ of Al Meezan Mutual Fund Limited in the meeting held on August 4, 2011, approved financial results for the fiscal year ended June 30 2011, and declared a final cash dividend @ 16 per cent i.e. Rs1.6 per share of Rs10 each. Including the interim payout of Rs0.5 per share, the total payout for the year was 21 per cent i.e. Rs2.1 per share of Rs. 10 each. In addition, the board also approved an interim divided of Rs. 0.15 per share i.e. @ 1.5 per cent for the period July 1 to July 31, 2011.The dividend declared by the board in the meeting held on August 4, 2011 will be paid to the shareholders whose names appeared in the register as at the close of business on July 28, 2011.The fund has provided annual return of 37.37 per cent to its unit holders in FY-11. The net assets of the fund as on July 31, 2011 stood at Rs. 1,724 million.