Mutual funds can invest abroad

In what is being seen as a landmark decision, the State Bank has allowed mutual funds operating in Pakistan to invest abroad. But initially the central bank has placed a cap of $15 million on such investment by a single mutual fund at a given time, says a circular issued by the Exchange Policy Department of the SBP on Saturday.

“This is a landmark decision,” says Mr. Jahangir Siddiqui who pioneered the open-ended mutual fund in Pakistan. “It is going to discourage capital flight from Pakistan and enable investors to diversify their portfolios geographically for the first time in the country.”