Funds Review: First Habib Islamic Income Fund corners the rest

September 5, 2019 (MLN): In the month of August 2019, Shariah Compliant Income Funds delivered outstanding performance. This is because the benchmark returns on these funds, which was set at 5.71% after taking the average of 6-month deposit rates of three ‘A’ rated Islamic Banks, was surpassed by all the 21 funds in shariah compliant income category.

The Islamic banks selected by the Mutual Funds Association of Pakistan (MUFAP) include Al Baraka Bank, Bank of Khyber and MCB Islamic Bank.

After successfully outshining this point of reference (5.71%), all the shariah compliant income funds recorded total returns within the range of 9.17% - 13.74% for the month mentioned above.

The above graph clearly illustrates that First Habib Islamic Income Fund emerged as the winner with a net adjusted yield of 13.74%, after its net asset value (NAV) jumped from Rs.100.82 per share to Rs.102 per share.

As per the data aligned by Mettis Global, the fund carried a medium risk profile and has a Stability Rating of “A(f)” by PACRA as of 28-Dec-18.  Furthermore, it places most of its investment in cash and TFCs. The fund also gave out dividend of Rs 0.998 per unit for the month under review.

Atlas Islamic Income Fund (ATLASIIF) took the second place by declaring a net adjusted yield of 12.13%, its NAV inched up from Rs. 508.75 per share to Rs 513.99 per share. The fund’s portfolio represents that the fund holds more than 80% of its investments in cash and the remaining in TFCs.

Next in line is NBP Islamic Mahana Amdani Fund, which declared a net adjusted return of 11.96%. This “low” risk profiled fund’s NAV hopped from Rs.10.0 per share to Rs.10.13 per share. The fund’s Asset Manager has been rated at “AM1” (very high quality) by PACRA.  The portfolio of this fund is mainly comprised of cash, TFCs, commercial papers and placement with banks & DFI.

Positioned next with 11.81% net adjusted returns on its NAV is Alhamra Daily Dividend Fund whose NAV remained stagnant at Rs 100 per share. This low profiled fund mostly invests in cash and commercial papers. 

To sum it up, the overall conduct of less volatile Shariah Compliant Income mutual funds in the month of August was remarkable as all the funds outstripped the benchmark and provided investors a higher return in medium to long-term.

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