July 2015: Most mutual funds underperform KSE-100 index
13 of the 21 equity-based funds posted lower returns than the benchmark.
Mutual funds with exposure in equities have faced volatility in recent months because of uncertainty on the Karachi bourse. PHOTO: AFP
KARACHI:
A majority of equity-based mutual funds underperformed the benchmark index in the first month of 2015-16.
According to data compiled by the Mutual Funds Association of Pakistan (MUFAP), 13 of the 21 mutual funds that invest mainly in listed companies posted a return in July that was less than the corresponding increase in the Karachi Stock Exchange (KSE) 100-Share Index.
The KSE-100 Index is typically the benchmark for most conventional equity funds operating in the country’s capital market. The KSE-100 Index finished at 35,741.5 points at the end of July, up 3.9% from the beginning of the month when it stood at 34,398.8.
Only eight stock funds could outperform the benchmark index in July by posting a relatively higher increase in their net asset values over the 31-day period. Funds outperforming the benchmark index last month were AKD Opportunity Fund (15.56%), JS Large Cap Fund (5.53%), PICIC Stock Fund (5.41%), Alfalah GHP Stock Fund (5.06%), JS Value Fund (5.02%), First Capital Mutual Fund (4.56%), Alfalah GHP Alpha Fund (4.51%), and United Stock Advantage Fund (4.12%).
Mutual funds with exposure in equities have faced volatility in recent months because of uncertainty on the Karachi bourse. In contrast with the last month, all stock funds had posted negative returns in May. But the poor performance of stock funds in May had followed outstanding returns in April when a majority of the equity-based conventional mutual funds posted returns higher than the benchmark index.
More than half of the equity funds outperformed the benchmark index in 2014-15 - a year when the KSE-100 Index outdid most regional markets by posting a rise of almost 15% on a year-on-year basis.
The worst-performing equity-based mutual fund in July was PICIC Energy Fund, which posted an absolute return of 0.91%. It was followed by Askari Equity Fund (1.81%) and Crosby Dragon Fund (1.99%).
As for the performance of Islamic equity funds in July, a majority of them outperformed the KMI-30 Index, which is typically considered the benchmark index for Shariah-compliant stocks.
As many as nine out of 13 Islamic equity funds posted monthly returns that were higher than 2.23%, the percentage by which the KMI-30 Index surged in July.
The best-performing Islamic equity fund in July was PICIC Islamic Stock Fund, which posted a return of 6.16%. It was followed by Alfalah GHP Islamic Stock Fund (4.31%) and Meezan Islamic Fund (4.07%).
The worst-performing Islamic equity fund in July was MCB Pakistan Islamic Stock Fund (0.29%), followed by HBL Islamic Stock Fund (1.3%) and NIT Islamic Equity Fund (1.75%).
Published in The Express Tribune, August 2nd, 2015.
A majority of equity-based mutual funds underperformed the benchmark index in the first month of 2015-16.
According to data compiled by the Mutual Funds Association of Pakistan (MUFAP), 13 of the 21 mutual funds that invest mainly in listed companies posted a return in July that was less than the corresponding increase in the Karachi Stock Exchange (KSE) 100-Share Index.
The KSE-100 Index is typically the benchmark for most conventional equity funds operating in the country’s capital market. The KSE-100 Index finished at 35,741.5 points at the end of July, up 3.9% from the beginning of the month when it stood at 34,398.8.
Only eight stock funds could outperform the benchmark index in July by posting a relatively higher increase in their net asset values over the 31-day period. Funds outperforming the benchmark index last month were AKD Opportunity Fund (15.56%), JS Large Cap Fund (5.53%), PICIC Stock Fund (5.41%), Alfalah GHP Stock Fund (5.06%), JS Value Fund (5.02%), First Capital Mutual Fund (4.56%), Alfalah GHP Alpha Fund (4.51%), and United Stock Advantage Fund (4.12%).
Mutual funds with exposure in equities have faced volatility in recent months because of uncertainty on the Karachi bourse. In contrast with the last month, all stock funds had posted negative returns in May. But the poor performance of stock funds in May had followed outstanding returns in April when a majority of the equity-based conventional mutual funds posted returns higher than the benchmark index.
More than half of the equity funds outperformed the benchmark index in 2014-15 - a year when the KSE-100 Index outdid most regional markets by posting a rise of almost 15% on a year-on-year basis.
The worst-performing equity-based mutual fund in July was PICIC Energy Fund, which posted an absolute return of 0.91%. It was followed by Askari Equity Fund (1.81%) and Crosby Dragon Fund (1.99%).
As for the performance of Islamic equity funds in July, a majority of them outperformed the KMI-30 Index, which is typically considered the benchmark index for Shariah-compliant stocks.
As many as nine out of 13 Islamic equity funds posted monthly returns that were higher than 2.23%, the percentage by which the KMI-30 Index surged in July.
The best-performing Islamic equity fund in July was PICIC Islamic Stock Fund, which posted a return of 6.16%. It was followed by Alfalah GHP Islamic Stock Fund (4.31%) and Meezan Islamic Fund (4.07%).
The worst-performing Islamic equity fund in July was MCB Pakistan Islamic Stock Fund (0.29%), followed by HBL Islamic Stock Fund (1.3%) and NIT Islamic Equity Fund (1.75%).
Published in The Express Tribune, August 2nd, 2015.