Returns of 12 out of the 21 equity-based conventional mutual funds operating in Pakistan remained higher than the benchmark stock index in 2014.
The remaining nine equity funds underperformed the Karachi Stock Exchange (KSE) 100-Share Index until December 30, according to statistics compiled by the Mutual Funds Association of Pakistan (Mufap).
The KSE-100 index is typically the benchmark for almost all conventional equity funds operating in the country.
The index stood at 31,954 points at the end of the second-last trading session of 2014, up 26.49% from the beginning of the calendar year when the reading was 25,261.
According to Standard Capital Securities’ research analyst Ubaid Hashmi, pharmaceutical, auto, chemical and consumer goods sectors outpaced the benchmark index by more than 100% in the outgoing year.
Pakistan remained the third best market in the world with 33.7% dollar-based returns in 2014, according to Elixir Securities. The best-performing equity-based mutual fund until December 30 was AKD Opportunity Fund, which posted an absolute return of 45.79%. It was followed by National Investment Unit Trust (41.63%) and JS Large Cap Fund (38.59%).
Other equity funds that posted returns higher than the benchmark index (until December 30) were NAFA Stock Fund (37.91%), Pakistan Stock Market Fund (35.6%), Lakson Equity Fund (32.77%), United Stock Advantage Fund (32.08%), ABL Stock Fund (31.16%), PICIC Stock Fund (30.35%), Alfalah GHP Alpha Fund (29.78%), IGI Stock Fund (28.55%) and First Capital Mutual Fund (27.21%).
Share prices of some stocks rose astoundingly during 2014, which helped the KSE-100 index cross the psychological barrier of 32,000 points recently. According to Hashmi, the best-performing stocks (until December 26) were Indus Motor Company (up 159.1%), Murree Brewery Company (151.7%), Pak Suzuki Motor Company (143.6%), Packages (138.8%), Archroma Pakistan (123.3%), Mari Petroleum Company (115.5%), Pioneer Cement (111.3%) and The Searle Company (100.4%).
Conventional equity funds performing worse than the benchmark index were JS Growth Fund (22.21%), Atlas Stock Market Fund (21.86%), Askari Equity Fund (21.67%), JS Value Fund (20.99%), Pakistan Strategic Allocation Fund (20.29%), First Habib Stock Fund (16.53%), Crosby Dragon Fund (16.19%) and HBL Stock Fund (15.39%).
The worst performing conventional equity fund in 2014 was PICIC Energy Fund that posted a return of 8.13% only.
Islamic equity funds
Mufap data shows that seven out of nine Islamic equity funds have been in existence since the beginning of 2014. Five out of the seven Islamic funds outperformed the KSE Meezan Index (KMI-30), which is typically the benchmark index for Shariah-compliant equity funds, until December 30.
KMI-30 Index went up 19.57% between January 1 and December 30.
The best Islamic equity fund was JS Islamic Fund, which posted an absolute return of 45.91% in 2014. It was followed by Al Ameen Shariah Stock Fund (29.01%), Al Meezan Mutual Fund (26.3%), Meezan Islamic Fund (23.87%) and ABL Islamic Stock Fund (20.82%).
Islamic equity funds underperforming the KMI-30 Index were HBL Islamic Stock Fund (18.82%) and Atlas Islamic Stock Fund (14.63%).
A quick recap
The GSP Plus status, which Pakistan earned in December 2013, came into effect on January 1 last year. It helped Pakistan earn an additional $910 million in export proceeds from the EU region during the first nine months of 2014, according to latest data of Eurostat.
The war among beverage makers over the infamous capacity tax spilled over into 2014. In the end, the tax, which was opposed by small bottlers, was struck down by the Lahore High Court.
Pakistan International Airlines and its planned privatisation continued to remain in the limelight. But Prime Minister’s Aviation Adviser Shujaat Azeem focused on restructuring the national carrier.
Pakistan successfully conducted the spectrum auction for 3G and 4G mobile broadband technology and earned $1.1 billion – to be paid in installments.
Dubai-based Cupola Group – that held the master franchise of Kentucky Fried Chicken (KFC) Pakistan for over a decade – sold its flagship KFC business to Delicious Holdings of the UAE.
The rupee witnessed sharp appreciation in its value against the dollar. It gained as much as 4% against the greenback mainly because of improvement in foreign exchange reserves during the year. From over Rs108 a dollar in December 2013, the rupee-dollar parity currently stands around Rs100.50 in the interbank market.
In a rare move, the federal government imposed a six-month moratorium on KASB Bank after the bank failed to address its capital adequacy issues. Now the financial institution is up for grabs, with Askari Bank, Sindh Bank and JS Bank conducting due diligence for a possible acquisition.
2014 saw a flurry of public offerings. The number of total public offerings in the year was 10 as opposed to only three in 2013. It was mainly because of increasing investment appetite for IPOs among institutional investors, analysts said.
Pakistan received $1.5 billion as a grant from Saudi Arabia, helping foreign exchange reserves, which at the time were alarmingly low.
The planned privatisation of OGDCL was scrapped after investors gave a cold shoulder and subscribed to only half of the total shares offered, dealing a blow to the ambitious privatisation agenda.
Published in The Express Tribune, January 1st, 2015.
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Minus the inflation and see what you get ;)
How come.. in the article u forget HINOPAK motors and Gandhara Nissan.. whose prices have increased more than 4 times..
@Ali Ather: It's capital gain. The share price has increased that much.
The best performing scrips e.g. INDUS with 159.1% up, is the total return? or just capital appreciation (without impact of dividend)?
Great info Mr. Kazim Alam !
Just to confirm that (for the sake of apple to apple compairson) the returns of mutual fund, that you have posted are also "dollar based return" like that of KSE return of 33.7%???