Annual Review: AWT Islamic Stock Fund’s strong portfolio begets highest return

January 14, 2020 (MLN): The uptrend of investment of the mutual funds' industry in Islamic Equity continued to witnessed in 2019, helped by a sharp recovery in equities in the second half of 2019.

To recall, for the year 2019, Pakistan equities is a tale of two halves where the benchmark KSE-100 index reported a decline of around 10.78% in 1H2019 followed by a very strong rebound with the stellar performance of around 19.82% in 2H2019.

Accordingly, the KSE Meezan Index (KMI-30), which is also the benchmark for all Islamic Equity Funds, posted a decline of 12% in 1H2019, after that it recuperated exuberantly, marking a growth of 22% in 2H2019. This suggests that over the year, KMI-30 index gained around 4,857 points and closed the year at 66,031 points, registering a notable growth of 8%YoY.

In line with the performance of KMI-30 index, all Islamic equity funds generated positive returns over the year except for the two i.e. NBP Islamic Energy Fund and AKD Islamic Stock Fund, moreover, 7 out of 17 funds in total managed to cross the yardstick of 8%. In addition, Oil &Gas Exploration Companies and Fertilizer sector emerged as the top choice for the Shariah Compliant Equity Funds.

Going by the data compiled by Mettis Global, AWT Islamic Stock Fund Equity Fund (AWTISF) emerged as the best annual performer with the largest positive return of 12.75%, as its Net Asset Value (NAV) rose from Rs. 89.82 per share at the end of 2018 to Rs. 101.27 per share at the end of 2019.

Major contribution in fund’s return during the year came from NML, OGDC, PPL MEBL, PSO, and ENGRO, as the fund placed most of its investment in Oil & Gas Explorations sector followed by Fertilizer sector and Oil & Gas marketing Companies.

Atlas Islamic Stock Fund (AISF), which carries a high-risk profile secured the second position by generating an annual return of 10.29%. The NAV of AISF hopped from Rs. 482.04 per share at the start of the year to Rs. 531.66 per share at the end of the year.

During the year, Oil & Gas Exploration Companies, Fertilizer, Cement and Commercial Banks appeared as the top preferred sectors for AISF. Scrip- wise, MEBL, ENGRO, OGDC, MARI, PPL and EFERT came out as the top invested security.

Following AISF closely was ABL Islamic Stock Fund (ABLISF) with annual returns standing at 10.24%. ABLISF’s NAV reached Rs.14.47 per share at the end of the year against Rs 13.129 per share recorded at the beginning of 2019.  

This high-risk profile fund during the year allocated most of its assets in equities and remaining in the bank deposits. Oil & Gas Exploration Companies remained ideal for ABLISF.

HBL Islamic Equity Fund (HBLIEF) landed as the fourth runner up, as it realized a 9.62% increase in its NAV, from Rs. 84.34 per share to Rs. 92.458 per share at the end of 2019. Just like its predecessors, HBLIEF held most of its shares in the Oil and Gas Exploration and Fertilizer Sector during the year under review.

Besides the abovementioned funds, Al Ameen Shariah Stock Fund, Alfalah GHP Islamic Stock Fund, and HBL Islamic Stock Fund also performed vigorously, as they also managed to beat the benchmark by generating annual returns of 9.47%, 8.59% and 8.45% respectively.

At last, speaking of payouts, only NIT Islamic Equity Fund gave the payout of Rs.0.19 per unit over the year.

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