Mutual fund industry grows 3% in third quarter

Equity funds outperform KSE-100 index.

KARACHI:

The mutual funds industry recorded static growth during the third quarter (January-March) of fiscal 2011, increasing three per cent to close at Rs229 billion, according to an InvestCap research note.

The industry showed a decline of two per cent in assets in March compared with the previous month. On the other hand, the industry registered a decent growth of 15 per cent during nine months (July-March) of the fiscal year.

The size of open-ended funds increased by four per cent in the third quarter, reaching Rs203 billion, while closed-end funds declined by four per cent during the period and stood at Rs26 billion.

The mutual funds industry size remained stagnant in the first quarter, but showed a growth of 10 per cent in the second quarter. The third quarter, however, witnessed lacklustre performance and saw the industry grow by only three per cent.

Comparison with the stock market

The benchmark KSE-100 index lost 1.8 per cent in the third quarter, while the equity funds category posted an average return of five per cent, outperforming the bourse.

Additionally, in March, the category earned an average return of 7.7 per cent against KSE-100’s return of 4.6 per cent. During the month, most equity funds outperformed the index.

Published in The Express Tribune, April 20^th,  2011.