October 7, 2019 (MLN): The 1QFY20 remained challenging for the Equity Funds as all funds within the category gave out negative returns except Faysal Stock Fund.
Before going in to details of Funds’ performances, it is worthwhile to first analyze the performance of KSE-100 index over the quarter, which also happens to be the benchmark of these funds.
The KSE-100 index lost nearly 1,822 points during the quarter, and closed at 32,078-mark. This translates into a decline of -5.38%, as compared to the previous quarter’s closing of 33,901 points.
A lot of factors played a role in speeding up the gravity on trading floors, these factors include; worsening economic condition of the country, government’s aggressive tax collection target of Rs 5.5 trillion, rise in price levels as a result of aggressive tax collection target.
Since the country witnessed improvement in several economic indicators, including decline in current account deficit and stability in exchange rate, the last month, provided some respite to the capital markets.
Keeping in view this dismal performance of benchmark index, it wouldn’t be hard to understand that the performance of equity mutual funds was in line with the KSE-100 Index.
Regrettably, among 27 mutual funds, all endured negative returns during the stated quarter except Faysal Stock Fund, which appeared as the winner with the positive return of 0.39%, as its Net Asset Value (NAV) went up from Rs 43.07 to Rs 43.24.
According to records maintained by Mettis Global Private Limited, Faysal Fund Stock holds high risk profile– mostly played in the field of Oil & Gas Exploration Companies and Chemical Sector, as it held most of its investments in FFCL (7.68%), LOTCHEM (7.16%), EPCL (6.69%) and POL (6.68%) as of August 2019.
Among those funds that gave out negative return during the quarter, First Capital Mutual Fund emerged as the best performer with the smallest negative return of 2.43%. The Fund’s NAV stood at Rs.6.23 per share at the start of 1QFY20 but had lost 15 paisa by the end of it.
First Capital Mutual Fund holds high risk profile, mostly invested in Commercial Banks and Oil & Gas Exploration sector.
Next in line is MCB Pakistan Stock Market Fund with a negative return of 3.5%. Its NAV fell by Rs 2.7 per share to Rs 76.52 per share. This high-risk profile fund held most of its investment in Commercial Banks, Oil & Gas Exploration and Fertilizer sector as of August 2019.
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