The country’s mutual funds industry, while continuing its upward trajectory, appreciated by further 5.6 percent MoM in Feb-12, to cross the Rs 350 billion mark, said the analysts at InvestCap. The industry volume climbed to Rs 360 billion ($3.96 billion) from Rs 342 billion ($3.76 billion) a month earlier.
“The open-ended funds’ size appreciated by five percent MoM, while that of closed-end funds’ grew by six percent to reach Rs 338 billion ($3.71 billion) and Rs22 billion ($241 million), respectively,” said Mazhar A. Sabir.
During the month, the analyst said, major growth was witnessed in the money market funds category, which rose by 10 percent MoM to close at Rs 138 billion ($1.52 billion) in Feb-12.
He said the Islamic equity funds also followed the suit and appreciated by six percent against eight percent surge witnessed in local equities market.
During 8MFY12 period (Jul-Feb12), mutual funds industry showed a healthy growth of 44 percent since Jun-11 closings, when the entire industry stood at Rs250 billion or $ 2.90 billion.
“The open-end funds increased by a solid 50 percent while closed-end funds’ size declined by 11 percent since then,” he said.
The income funds category withheld almost the same levels in Feb-12 as earlier, at Rs84 billion ($923 million). However, on a cumulative basis during 8MFY12, the income funds category showed an enormous growth of 117 percent in terms of size. As the central bank (SBP) kept the discount rate unchanged at 12 percent in its last monetary policy, the downward valuation adjustments were witnessed in T-bills and PIBs holdings. Thus, as far as return of income funds is concerned, this category earned an average annualized return of 10.2 percent during Feb-12, down by 0.4 percent over last month. During 8MFY12, the income funds also earned average return of 10.2 percent on annualized basis.
Money market funds category constituting 42 percent of the total size of the open-end funds (38 percent of the entire industry) again outshined the industry and rose by 10 percent MoM in Feb-12 to reach at Rs138 billion ($1.52 billion), against Rs125 billion ($1.37 billion) in Jan-12. NBP Fullerton Asset Management (NAFA) launched NAFA Money Market Fund during Feb-12. With such consistent pace, the money market funds’ cumulative size was up 78 percent during 8MFY12 (Jul-Feb12) which was the second highest return recorded within the industry during the period, following the income funds category. After having another month of positive returns from equities (KSE100 index up 8 percent MoM in Feb-12), the equity funds category showed positive march in its funds size appreciating by 6 percent MoM to close at Rs49 billion ($538 million).
However, despite the back-to-back improvement in equities over the last two months, the equity funds’ size still stands 4 percent down in 8MFY12 compared to the level observed in Jun-11, against the KSE100 index positive movement of 3 percent during the same period. In the month of Feb-12, the KSE100 index appreciated by 8.5 percent MoM while showing a slight underperformance, equity funds category earned an average return of 7.2 percent MoM, with the highest return earned by the AKD-Opportunity Fund (AKDOPF), which secured a return of 14.6 percent MoM, beating not only the industry averages but also the KSE100 and KSE30 index returns of 8.5 percent and 6.6 percent, respectively.
Remarkably, during 8MFY12, the equity funds category posted an average return of 6.8 percent since Jun-11, outperforming the KSE100 index return of 3.1 percent and KSE30 index return of 2.8 percent for the same period.
Amongst individual funds, ABLSF recorded the maximum return of 16.1 percent, followed by ASMF which secured a return of 12.0 percent during this period.