IFMP Mutual Fund Distributors Certification (MFDC), Pakistan key terms

The per-unit value of a fund, calculated by subtracting total liabilities from total assets and dividing by the number of outstanding units, usually struck at the close of each business day.

The price at which an investor buys units from the fund, equal to NAV plus any applicable front-end load or sales charge.

The amount paid to an investor when units are sold back to the fund, typically NAV less any applicable exit charge or contingent load.

The practice of executing subscriptions and redemptions at the next NAV calculated after the order is received, rather than at a price already known.

The daily deadline by which a valid application must reach the distributor or registrar to receive that day's price; later orders roll to the next dealing day.

An investor's application to buy units of a mutual fund, accompanied by the required payment and, where needed, valid identity and account documentation.

A person or entity recorded in the register as owning units in a collective investment scheme, holding rights to distributions and redemption proceeds.

A scheme that continuously issues and redeems units at NAV on demand, so its unit count changes with investor flows rather than being fixed.

A scheme with a fixed number of units listed on an exchange; investors buy and sell those units in the market rather than redeeming them with the fund.

A scheme investing in short-term, high-quality debt instruments, aiming to preserve capital and provide liquidity with modest, stable returns.

A scheme that mainly holds fixed-income securities such as government or corporate bonds and distributes periodic income to unit holders.

A scheme that invests predominantly in listed shares, offering higher long-term growth potential with correspondingly greater price volatility.

A scheme that spreads investments across shares, bonds, and cash according to a stated policy or target mix, balancing growth and stability.

A passively managed scheme designed to track a specified market index by holding securities in proportions similar to that index.

A fund whose units trade on an exchange throughout the day, combining pooled diversified exposure with intraday market pricing rather than once-daily NAV dealing.

A scheme that invests in units of other mutual funds instead of directly in securities, adding a second layer of management fees and diversification.

A payment or reinvestment of income or realized gains made to unit holders, reducing the fund's NAV by the amount distributed.

An option under which a unit holder's cash distribution is automatically used to buy additional units instead of being paid out.

The annual fund operating costs, including management and administrative fees, expressed as a percentage of average net assets.

The recurring charge deducted from fund assets to pay the asset manager for portfolio management and related services under the constitutive documents.

A sales charge deducted when units are purchased, so the investor pays more than NAV per unit; often called a subscription or initial charge.

A charge levied when units are redeemed, sometimes scaled down over the holding period and often called a contingent or exit load.

A redemption charge that applies only in specified circumstances, such as redeeming within a short period after purchase, to discourage short-term trading.

The offering document disclosing a scheme's investment objective, policy, risks, fees, and operational details, which must be provided to prospective investors.

The legal instrument constituting a collective investment scheme, setting out the powers and duties of the management company and the trustee.

An independent party holding scheme assets in custody and overseeing the management company's compliance with the constitutive documents and applicable regulations.

An institution responsible for safekeeping a fund's securities and cash, settling trades, and maintaining records of assets held on the scheme's behalf.

The entity maintaining the register of unit holders and processing subscriptions, redemptions, transfers, and distributions on behalf of the scheme.

The official record of who owns which units in a scheme, used to determine entitlement to distributions, redemption proceeds, and voting rights.

The mandatory process of identifying investors, verifying their identity and source of funds, and screening them before opening an account.

Laws, rules, and internal controls requiring firms to detect, report, and prevent the use of funds for laundering criminal proceeds, including suspicious transaction reporting.

Ongoing assessment of an investor's profile, beneficial ownership, and transaction pattern, refreshed at defined intervals and on trigger events.

A confidential filing made to the financial intelligence unit when an intermediary suspects funds or activity are linked to criminal conduct.

The process of matching a recommended fund to an investor's objectives, time horizon, risk tolerance, and financial circumstances before advising or selling.

A structured questionnaire and discussion used to classify an investor's willingness and capacity to bear investment losses into a risk category.

The degree of investment value fluctuation an investor is emotionally and financially able to accept while still meeting stated goals.

Spreading money across different securities, sectors, or asset classes so that any single loss has a limited effect on the overall portfolio.

The extent to which an investment's value fluctuates over time, commonly measured by the standard deviation of returns and used as a risk indicator.

A situation where a distributor's own incentives, such as commission levels, could improperly influence the advice given to an investor.