Islamic Equity Funds: Meezan Energy Fund outperforms the rest

March 24, 2022 (MLN): Islamic Equity Funds in which investments are in accordance with the Islamic principles, suffered largely due to the depressing performance of KMI-30 index in the month of February 2022.

During the month, KMI – 30 Index, which is the benchmark of the Shariah Compliant Equity funds, lost 1,444 points, marking a decline of 1.96% MoM which led each individual shariah-compliant towards the negative territory.

According to the data aligned by Mettis Global Private Limited, among 17 shariah-compliant funds, 9 of such funds went a few steps beyond the index’s decline and recorded over 2% decline in their respective returns.

Among those funds whose decline in returns was fewer than the decline in KMI-30 index, Meezan Energy Fund (MEEZANEF) has emerged as the best performer in the month of February, having recorded a 0.02% falloff in its Net Asset Value (NAV).

MEEZANEF mostly played in Oil & Gas Exploration and Power Generation & Distribution companies, as it held most of its investments in MARI (19%), OGDCL (17%), PPL (16%), POL (13%), HUBCO (13%) and PSO (7%) as of February 2022.

After MEEZANEF, the Al Ameen Islamic Energy Fund realized a 0.25% decline in its NAV, followed by NBP Islamic Energy Fund (0.3%).

Both of these funds also held the larger portion of their investments with Oil & Gas exploration Companies i.e., 64% and 65.6% respectively while the rest went in the Oil & Gas Marketing Companies, and Power Generation & Distribution Companies and others. The funds have over 13% of its holdings in MARI, PPL, OGDC, HUBCO etc.

Meanwhile, the top three Islamic equity funds that posted the highest decline in returns were AKD Islamic Stock Fund, Faysal Islamic Stock Fund and HBL Islamic Equity Fund as their NAV during the month declined by a notable 7.93, 5.56%, and 4.51%, respectively.

In terms of Payouts, only AL Habib Islamic Savings Fund (AHISF) gave out a dividend of Rs0.72 per share in February.

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