Under pressure, most funds post negative return

Performance of 16 was still better than drop in KSE-100 Index in August.

KARACHI: Amidst volatility across global securities markets, a majority of stock funds operating in Pakistan posted a negative return last month.

According to data compiled by the Mutual Funds Association of Pakistan (Mufap), 14 of 21 mutual funds that invest mainly in listed companies posted a loss on a month-on-month basis in August.

However, the performance of 16 funds was still better than the corresponding month-on-month drop in the benchmark index in August.

The KSE-100 Index is typically the benchmark for most conventional equity funds operating in the country’s capital market. The KSE-100 Index was at 34,726.51 points at the end of August, down 2.84% from the beginning of the month when it stood at 35,741.52 points.

The four funds that posted a positive return, however small, in their net asset values (NAVs) last month were United Stock Advantage Fund (0.69%), Alfalah GHP Alpha Fund (0.68%), Alfalah GHP Stock Fund (0.54%) and PICIC Stock Fund (0.23%). HBL Stock Fund, JS Growth Fund and JS Value Fund registered no change in their NAVs in August, Mufap data shows.

The biggest loss in the NAVs in August was posted by Atlas Stock Market Fund (-5.14%), followed by Askari Equity Fund (-4.4%) and PICIC Energy Fund (-4.07%).



After reaching the all-time high of 36,228 points, the KSE-100 Index came under pressure as foreign institutional investors pulled out money in the immediate aftermath of a global meltdown in equities and commodities markets. Foreigners remained net sellers of $61 million in August.

The situation became worse as domestic capital-protected mutual funds started offloading shares in the market given the structure of their funds.

According to KASB Securities, the KSE-100 Index was still the second best-performing frontier market in the MSCI Universe with the year-to-date return of 8%.

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.

As for the performance of Islamic equity funds, only two of 13 such funds could manage to post a positive return in August. These funds were PICIC Islamic Stock Fund (1.63%) and Alfalah GHP Islamic Stock Fund (0.3%).

The worst-performing Islamic equity fund in August was Atlas Islamic Stock Fund (-4.58%), followed by MCB Pakistan Islamic Stock Fund (-2.43%) and ABL Islamic Stock Fund (-2.33%).

Published in The Express Tribune, September 2^nd,  2015.

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