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New entrant, NBP Islamic Daily Dividend stands first to park your cash in money market

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December 18, 2019 (MLN): The attractive riba-free returns followed by highly liquid investment in low-risk Shariah Compliant securities on short term basis make Shariah Compliant Money Market Funds a safe haven. All Seven Shariah Compliant Money Market Funds remained competitive as these funds exceeded annual benchmark set by Mutual Funds Association Pakistan (MUFAP) in November 2019.

To assess the performance of these funds, the benchmark is set which is the average of three months deposit rate of three (3) AA rated banks or Islamic windows of conventional banks as selected by MUFAP. The banks are Sindh Bank, Faysal Bank and Bank of Punjab and the annual average benchmark as per their deposit rates has come out at 5.72%.

All funds delivered the profitable returns during the stated period which included; NBP Islamic Daily Dividend Fund (NBPIDDF), Meezan Rozana Amdani Fund (MEEZANRAF), NBP Islamic Money Market Fund (NBPIMMF),  HBL Islamic Money Market Fund (HBLIMMF), Faysal Halal Amdani Funds (FAYSALHAF), Al-Ameen Islamic Cash Fund (AICF), and Meezan Cash Fund (MEEZANCF).

A performance chart put together by Mettis Global shows that all the seven Islamic money market funds recorded their annual return within a range of 11.38%-12.09%.

This time, a new entrant, NBP Islamic Daily Dividend Fund took a lead amongst all others by standing at 12.09% total returns versus the benchmark return of 5.72%. The funds’ Net Asset Value (NAV) pegged at Rs.10 per share in November 2019.

Around 68% of net assets of the fund are invested in bank deposits which enhances the liquidity profile of the fund.  Some investment of around 16% is allocated in short term Sukuk. The fund has had its fund’s stability rated at ‘AA (f)’ by the Pakistan Credit Rating Agency (PACRA).

Meezan Rozana Amdani Fund (MEEZANRAF) stood second amongst all others by giving 12.07% total annual returns. Its NAV clocked in at Rs.50 per share which remained the same when compared to previous month’s NAV.

One-year-old MEEZANRAF has a more diversified portfolio in which investments are allocated to banks & DFIs, term finance certificates (TFCs) in addition to cash.

Positioned at the third place amongst top performers is NBP Islamic Money Market Fund (NBPIMMF) giving 11.83% total annual returns as its net asset value (NAV) hopped from Rs.10.44 per share to Rs.10.54 per share.

The fund carries an extremely low-risk profile and has had its fund’s stability rated at ‘AA (f)’ by Pakistan Credit Rating Agency (PACRA), as of December 2018.

Following NBP is HBL Islamic Money Market Fund (HBLIMMF) with annual returns standing at 11.62%. Its final NAV dropped marginally to Rs.101.87 per share in November 2019. Most of the assets of the fund are invested in cash and some are allocated to commercial papers.

Speaking of payouts, HBL Islamic Money Market Fund gave the largest total payout of Rs.1.07 per unit during November 2019, whereas Al-Ameen Islamic Cash Fund paid Rs.0.785 per unit in November 2019.

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Posted on: 2019-12-18T15:16:00+05:00

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