March 19, 2020 (MLN): The Mutual Funds Industry was not as lucky during the month of February 2020, as the total Assets Under Management fell by around 1.8% to Rs. 700 billion as compared to the previous month.
According to the report published by Spectrum Securities, the AUM of Money Market Fund plummeted by 0.2% MoM, Equity Funds by 10.6% MoM and Shariah Compliant Equity by 14.2%, whereas, for Shariah Complaint Income and income fund, the AUM grew by 22.1% MoM and 3.8% MoM respectively.
Equity Mutual Funds
The month of February was host to several antagonistic news for the domestic stock market that shifted investors into panic mode thereby wiping out steady gains of last month.
Subsequently, the KSE-100 index lost around 3,647 points during the month and concluded at 37, 983 -level, nearly 8.76% lower than the previous month’s close of 41,630 points.
Keeping in line with the performance of the benchmark index, the equity mutual funds too performed disastrously, as most of the returns were negative. However, only 16 out of the total 27 stocks managed to not surpass the yardstick set by the KSE-100 index.
Out of these 16 funds, NBP Financial Sector Fund, UBL Financial Sector Fund, and HBL Equity Fund were the most preferred stocks as they generated the least negative returns at 5.4%, 5.77%, and 6.19% respectively.
Shariah Compliant Equity Funds
A host of negative news in the month of February 2020 that weighed on equity market, kept a tight rein on investors to make profits as all the funds that invest in Shariah Compliant Equity markets posted negative returns during the month.
This was in line with the depressing performance of the KSE Meezan Index (KMI-30) which is a benchmark for all Islamic Equity Funds.
Just like the KSE-100 Index, KMI-30 index also succumbed to several adverse events witnessed during the month which include; overshooting of market consensus of inflation reading for January, FATF decisions to keep Pakistan in the grey list until the next review, delays in the conclusion of the staff-level agreement and the king of all, rising jitters from CoVID-19 both at the local and global level.
Consequently, the KMI-30 index lost around 7,641 points during the month, marking a decline of 11% MoM and led each shariah-compliant fund towards the negative territory.
As all 18 shariah-compliant funds posted negative returns during the month, 15 such funds posted a fewer decline in their returns as compared to the KMI-30 index. Of these 15 funds, the top 3 best performing funds were Al Ameen Shariah Stock Fund, First Habib Islamic Stock Fund, and Al Meezan Mutual Fund.
Al Ameen Shariah Stock Fund recorded an 8.36% decline in its Net Asset Value (NAV), followed by First Habib Islamic Fund and Al Meezan Mutual Fund whose returns declined by 8.7% and 9.07% respectively.
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