KARACHI: Assets of mutual funds have crossed the Rs300 billion mark once again, with a rise of 4.5% month-on-month in November and closed at Rs302 billion. The growth in the industry’s asset size has been phenomenal at 74% since January 2009, mainly driven by fixed income and money market funds contributing a cumulative 93%, says a research report.
Earlier, the industry peaked at Rs395 billion in April 2008 but later bottomed out at Rs174 billion in January 2009 due to massive redemption amid economic slowdown in the country, said the report prepared by InvestCap brokerage house.
The growth in mutual funds came despite continuous fall in the equity market, as income funds improved further.
In November, income funds showed a handsome growth of 21% from the previous month to reach Rs55 billion. The assets grew primarily because of appreciation of 151% and 101% in UBL’s income funds namely, UBL Government Securities Fund and United Saving Income Fund respectively.
However, yields on income funds remained lower in November. As a result, income funds earned an average return of 10.1%, down by 615 basis points over previous month.
On the other hand, the size of equity funds declined by 5.8% from October while Islamic equity funds dropped 3.9%, mainly on the back of the fall in the stock market.
Published in The Express Tribune, December 21st, 2011.
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