KARACHI – The mutual funds in Pakistan achieved 15 percent growth in the nine months of the ongoing financial year. As far as the performance in different categories is concerned, the size of open-ended funds which stood at five percent increased by four percent in 3QFY11 reaching Rs 203 billion while the size of the closed end funds came at Rs26 billion, showing a decline of four percent during 3Q-FY11.
However, mutual funds witnessed slow growth during 3QFY11, as its assets increased by three percent and amounted to Rs229 billion.
The mutual fund industry, however, has shown a decline of two percent in March 2011 in comparison with March 2010. Comparing growth of the zero percent local mutual funds industry in quarterly terms, the industry size remained stagnant in 1QFY11 (July-September 2010) and increased by only two percent, but showed good growth of 10 percent in the second quarter of FY11 (October-December 2010) mainly on the back of the upward movement of equity bourses, said Mazhar Sabir of the InvestCap Research.
He stressed that in March 2011 the income funds category earned annualised return of 21 percent, better than the previous month’s return of 18.7 percent backed by the upward revision in TFC pricing during the month. The income funds earned 12.6 percent average annualised return in 3QFY11 and on cumulative basis, during 9MFY11, the category posted average annualised return of 11.2 percent. The size of the income funds which stood at Rs38 billion in March 2011 continued its negative trend and declined by 11 percent month-on-month. During 3QFY11, the income funds, which showed a decline of 10 percent, were ignored by investors amid volatility in the TFC pricing methodology adopted by the industry.
The money market funds category crossed the milestone of Rs 50 billion in December 2010 and distinguished itself as the highest funds managing category. During 3QFY11, the money market funds showed an appreciation of 25 percent to reach Rs 62 billion.
However, in March 2011, the category is showing a decline of seven percent on a monthly basis. The money market funds category earned average annualised return of 12.1 percent, which is slightly lower than the last month’s return of 12.7 percent. During 3QFY11, the money market funds category posted average annualized return of 12.2 percent.
The benchmark KSE-100 index lost 1.8 percent in 3QFY11, while the equity funds’ category posted an average return of 5 percent, outperforming the benchmark.
Simultaneously, in March 2011, the category earned average return of 7.7 percent as against the KSE100 index return of 4.6 percent. During the month, most equity funds were observed to have outperformed the return in the benchmark KSE-100 index.
