Islamic Equity Funds: AWT Islamic Stock Fund seems like cream of the crop

October 10, 2019 (MLN): Given the ever-present risks to equity prices and the ever-changing value of commodities, making a profit on investments remained tough, as all the funds that invest in Shariah Compliant Equity markets posted negative returns during 1QFY20. This was in line with the fall of the KSE Meezan Index (KMI-30) during the period.

KMI – 30 Index lost 2,967 points during 3 months of FY20, marking a decline of 5% which led each individual shariah compliant towards the negative territory.

Among all 17 shariah compliant funds, only 2 funds posted fewer decline in their returns as compared to KMI-30 index. Of these 2 funds, AWT Islamic Stock Fund (AWTISF) emerged as best performer, having recorded 1.79% fall off in its Net Asset Value (NAV).

AWTISF which holds moderate to high risk profile mostly played in Fertilizer Sector, Textile Composite and Oil & Gas Exploration Companies, as it held most of its investments in ENGRO (13.89%), NML (13.35%) and OGDC (11.59%) as of August 2019.

Following AWTISF in the list of top performing Islamic equity funds is Alhamra Islamic Stock Fund with a 4.3% decline in returns as its NAV went down by 60 paisa per share to Rs 11.52 per share, during the period.

Alhamra Islamic Stock Fund comprises high risk profile, held most of its shares in Oil & Gas Exploration Companies and Fertilizer sector As of August 2019, with the maximum investment in POL (11.1%) followed by PPL (10.9%), OGDC (10.8%) and ENGRO (10.1%) respectively.

After Alhamra Islamic Fund, the ABL Islamic Stock Fund (ABL-ISF) realized a 5% decline in their NAV, followed by Alfalah GHP Islamic Stock fund (AGHP-ISF) (5.01%).

On the other hand, the funds that suffered a brunt of damage due to poor performance of KMI-30 index include, Meezan Energy Funds (12.69% decline in NAV), AKD Islamic Stock Fund (12.12% decline in NAV) and NBP Islamic Energy Fund (7.9% decline in NAV) respectively.

In terms of Payout, only NIT Islamic Equity Fund gave out dividend of Rs 0.19 per share for the period under review.

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