January 13, 2020 (MLN): The departed year of 2019 was full of unforeseen turns and revolutions for the economy of Pakistan, with several spectators calling it a ‘tale of two halves’. A careful analysis of the trend followed by the economy over the year shows that the first half brought the country under several economic dilemmas, whereas the second half startled many for the undisputed recoveries that were witnessed across the board.
However, the same cannot be said for the Fixed Income market, for it followed an entirely different trajectory during the year as compared to the rest of its investment counterparts, with the first half being more of a rejoicing phase for it than the second half.
To further elucidate our understanding of the annual performance of fixed income mutual funds, it would be imperative to see which ones successfully crossed the benchmark rate i.e. the annual average of 6-month KIBOR, which according to our calculation, stands at 12.58%.
The data maintained by Mettis Global shows that only 3 out of 29 fixed income mutual funds managed to surpass the yardstick, with the NBP Government Securities Savings Fund (NBPGSSF) emerging as the top performer with an annual return of 13.82%. The net assets of NBPGSSF were valued at Rs. 10.33 per share on December 31, 2019, as compared to Rs. 9.08 recorded at the start of the year.
AWT Income Fund (AWTIF) took the second spot by generating an annual return of 13.63%. The Net Asset Value of AWTIF hopped from Rs. 100.42 per share at the start of the year to Rs. 114.11 per share at the end of the year.
MCB Pakistan Sovereign Fund (MCBPSF) was the third-best choice for investors, as its NAV surged from Rs. 50.62 per share at the start of the year to Rs. 57.33 per share at the end of the year, thus creating returns of 13.25%.
While only three fixed-income funds managed to jump over the benchmark, the performance of the rest of the funds was pretty decent as well. For instance, Atlas Sovereign Fund produced returns of 12.51% i.e. merely 7bps shy of the yardstick. Likewise, Faysal Financial Sector Opportunity Fund gave returns of 12.46% to its investors, which is pretty much in line with the benchmark rate.
While it failed to make it to the list of top performers, Atlas Income Fund, nonetheless, provided the highest payout of Rs. 36.5 per share along with a return of 11.91% to its investors.
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