Performance review: MCB Pakistan Sovereign Fund outshines its peers in outgoing quarter

April 15, 2019 (MLN): The performance of the Income Funds during the outgoing quarter January-March turned out to be mediocre. This is because the benchmark return on these funds, which was set in line with 6-month PKRV of 10.58%, was surpassed by only 4 out of the total 31 funds.

Out of these, MCB Pakistan Sovereign Fund (MCBPSF) appeared as the best performer, as it provided the highest return of 12.01% to its investors. This can be largely attributed to the allocation of funds in its portfolio, which showed that 53.37% of funds were invested in T-Bills, 10.77% were invested in Pakistan Investment Bonds (PIBs), while 35.02% were held in cash. Moreover, MCBPSF successfully surpassed its benchmark rate.

Next in line was Dawood Income Fund (DAWOODIF), whose return stood at 11.36%. The portfolio of this mutual fund showed that 53.36% of the investment was placed with banks and DFIs, 31.2% of the investment was made in Commercial Papers while 14.45% of the investment was made in Term Finance Certificates (TFCs). Evidently, DAWOODIF met the benchmark criteria.

On the other hand, NIT Income Fund (NIT-IF) provided the lowest returns of only 7.61%, and clearly failed to exceed the benchmark rate. The reason behind this below-average performance could be the structure of its portfolio, which showed that 43.33% of the funds were placed with banks and DFIs, 31.18% were invested in TFCs, while 21.04% accounted for others including receivables.

In addition to this, 3 out of the total income funds offered dividend payouts to investors, with Atlas Income Fund (ATLASIF) providing a payout of Rs. 18. This was followed by Atlas Sovereign Fund (ATLASSF) and NAFA Savings Plus Fund (NAFASPF), which gave a payout of Rs. 4 and Rs. 0.2462, respectively.

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