Sixteen of the 21 equity-based conventional mutual funds operating in Pakistan posted returns that were higher than the benchmark index in September, reflecting investors’ growing insensitivity to the unending political instability in the country.
According to data compiled by the Mutual Funds Association of Pakistan (Mufap), only five funds in September underperformed the Karachi Stock Exchange (KSE)-100 Index, which is typically the benchmark for almost all conventional equity funds.
The KSE-100 Index stood at 29,726.39 points at the end of September, up 4.05% from a month ago.
According to KASB Securities research analyst Mohammad Fawad Khan, the KSE benchmark index outperformed the MSCI Frontier Markets-100 Index by 290 basis points in September. With 17.7% year-to-date returns – or 20.3% in aIndex has emerged as the third best performing market among MSCI frontier markets.
With $53 million inflows in September, Khan said incessant foreign flows remain a key hallmark of Pakistan’s equity market.
“The risk of paralysis of government’s activities and the use of violence to remove protesters has receded. We believe the reduced headcount in the two sit-ins in the capital city does not portend an end to the current crisis,” Khan added.
The best-performing equity-based mutual fund during September was AKD Opportunity Fund, which posted an absolute monthly return of 12.47%. It was followed by PICIC Stock Fund (10.66%) and JS Large Cap Fund (8.7%).
Other equity funds that posted returns substantially higher than the benchmark index in September were Lakson Equity Fund (7.43%), United Stock Advantage Fund (7.42%), National Investment Unit Trust (7.33%), NAFA Stock Fund (7.21%) and Alfalah GHP Alpha Fund (6.17%).
The worst performing conventional equity fund in September was Crosby Dragon Fund that posted a return of 1.69% on a month-on-month basis. Pakistan Strategic Allocation Fund was the second worst performer last month with an absolute monthly return of 2.91%.
Other conventional equity funds performing worse than the benchmark index in the third month of the current fiscal year were ABL Stock Fund (3.72%), PICIC Energy Fund (3.89%) and HBL Stock Fund (3.9%).
Mufap data shows that two of the nine Islamic equity funds posted negative month-on-month returns in September. The typical benchmark for Shariah-compliant equity funds, KSE Meezan Index (KMI-30), increased by 4.05% last month. PICIC Islamic Stock Fund remained the best Shariah-compliant equity fund in September with an absolute return of 11.18%.
Published in The Express Tribune, October 4th, 2014.
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