Income Fund Review: MCB Pakistan Sovereign Fund remains a front-runner

October 16, 2019 (MLN): With an objective to generate current income through dividend and interest payments while carrying a minimum risk, the fact sheet of conventional income fund shows that at the end of 1QFY20, all the funds under this category delivered rather healthy returns to their investors.

Among the funds that successfully outperformed its peers and bypassed their respective yardstick, MCB Pakistan Sovereign Fund appeared as the best performer, as it generated highest annualized return of 19.86% against its benchmark return of average 6-Month Pakistan revaluation rate (PKRV) rate, which was set at 13.87% during the period.

The Objective of this fund is to deliver income primarily from investments in government securities. Its Net Asset Value (NAV) during the period went up by Rs 2.66 per share to Rs 55.79 per share. The fund carries low to moderate risk profile as most of its portfolio comprises of cash (53.89%) and T-Bills (43.32), while allocation in equities stood at 2.45% as of September 2019.

This was followed by NAFA Government Securities Savings Fund, which provided annualized return of 17.7% to its investors against its benchmark return of 6M-PKRV rate. The fund’s NAV reported a surge of 46 paisa per share to Rs 10.77 per share. The fund carries low risk profile as its objective is to provide competitive return from portfolio of low credit risk by investing primarily in Government Securities. Moreover, its portfolio consisted of investments in PIBs (75.89%), Cash (16.7) and other including receivables (8%) as of September 2019.

Next in line was AWT Income Fund, whose return stood at 15.96% against its benchmark of average 6-Month KIBOR rate which was set at 13.97% during the said period. The objective of this low to moderate risk profile fund is to generate competitive returns by investing in short to long term debt instruments and securities. The portfolio of this mutual fund showed that 38.37% of the investment was placed in PIBs, 21.65% of the investment was made in Cash while 18.89% of the investment was made in T-Bills.

In addition to this, 2 out of the total conventional income funds offered dividend payouts to investors, with NIT Government Bond Fund providing a payout of Rs.0.88 per share. This was followed by NIT Income Fund which gave a payout of Rs.0.9 per share.

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Posted on: 2019-10-16T16:58:00+05:00

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