Army Welfare Trust (AWT) Investments Pakistan is seeking to secure a larger pool of retail investors to drive the firm’s latest target of growing the value of its Shariah compliant assets under management (AuM) by five times to PKR150 billion (US$538.9 million) come 2027.
CEO Sajad Anwar expressed confidence that target can be achieved as the firm anticipates the AuM value rising by at least 100% in the coming year and doubling again in the next, to reach the lofty ambition by the end of 36 months.
“We started off our funds with total AuM value of PKR200 million (US$718,500) and in 2½ years, we have grown these to PKR37 billion (US$132.9 million) as at the 30th September 2024. This is the kind of rapid growth that we have seen.”
Anwar told IFN Investor such a performance led to AWT Investments receiving the Best Islamic Income Fund Manager Award 2024 and Best Emerging Asset Management Company Award 2024 at the recent CFA Society Pakistan’s 21st Annual Excellence Awards Ceremony.
“We were recognized as our investor base grew by 44% as a company, from 3,500 to 5,000, and our AuM quadrupled from PKR7.2 billion (US$25.87 million) to PKR29.7 billion (US$106.7 million) in the one year ended the 30th June 2024.”
Anwar credits the firm’s focus on retail customers to the rapid AuM growth trajectory, noting that the ratio between institutional and individual investors had transformed from 80:20 about a year ago to 55:45 currently.
Outlining the strategic focus, Anwar said much of the AuM growth over the past year came from customer referrals. “We are also targeting more retail investors as individuals offer ‘sticky money’, they tend to stay longer and do not move investments often compared with institutional investors.”
A key reason why AWT’s fixed income funds have received such welcome is that of customers comparing returns against bank accounts. While the highest bank fixed deposits (FDs) pay 11-12% annual profit, Anwar said AWT fund returns averaged around 22% yearly.
“The returns to customers will become reduced as the Pakistan central bank is lowering the national interest rate. But our fund returns to customer will still be higher compared to banks because our operational costs and fees are low.”
Other advantages offered by AWT include an affordable PKR10,000 (US$36) entry point and waiving the lock-in period for fund investments, unlike bank FDs. Client transactions are conducted online or via a mobile app, or by using kiosks placed at strategic public spots.
Anwar said these efforts form a necessary strategy to attract and keep retail customers, cost-wise, as “it is difficult obviously as they are of small tickets in size”. But the extensive use of technology means “if I’m growing my AuM by 100%, my staff strength will (only) grow by 5% to 10%”.
Looking forward, AWT is aiming to launch new funds to cover other asset classes while also converting its existing conventional funds into being Shariah compliant. “While so many clients tell us they are willing to accept lower returns to follow their faith, we like to surprise them.”
