Twelve equity funds beat KSE-100 index in 2014

By Kazim Alam

Returns of 12 out of the 21 equity-based conventional mutual funds operating in Pakistan remained higher than the benchmark stock index in 2014.

The remaining nine equity funds underperformed the Karachi Stock Exchange (KSE) 100-Share Index until December 30, according to statistics compiled by the Mutual Funds Association of Pakistan (Mufap).

The KSE-100 index is typically the benchmark for almost all conventional equity funds operating in the country.

The index stood at 31,954 points at the end of the second-last trading session of 2014, up 26.49% from the beginning of the calendar year when the reading was 25,261.

According to Standard Capital Securities’ research analyst Ubaid Hashmi, pharmaceutical, auto, chemical and consumer goods sectors outpaced the benchmark index by more than 100% in the outgoing year.

Pakistan remained the third best market in the world with 33.7% dollar-based returns in 2014, according to Elixir Securities. The best-performing equity-based mutual fund until December 30 was AKD Opportunity Fund, which posted an absolute return of 45.79%. It was followed by National Investment Unit Trust (41.63%) and JS Large Cap Fund (38.59%).

Other equity funds that posted returns higher than the benchmark index (until December 30) were NAFA Stock Fund (37.91%), Pakistan Stock Market Fund (35.6%), Lakson Equity Fund (32.77%), United Stock Advantage Fund (32.08%), ABL Stock Fund (31.16%), PICIC Stock Fund (30.35%), Alfalah GHP Alpha Fund (29.78%), IGI Stock Fund (28.55%) and First Capital Mutual Fund (27.21%).

Share prices of some stocks rose astoundingly during 2014, which helped the KSE-100 index cross the psychological barrier of 32,000 points recently. According to Hashmi, the best-performing stocks (until December 26) were Indus Motor Company (up 159.1%), Murree Brewery Company (151.7%), Pak Suzuki Motor Company (143.6%), Packages (138.8%), Archroma Pakistan (123.3%), Mari Petroleum Company (115.5%), Pioneer Cement (111.3%) and The Searle Company (100.4%).

Conventional equity funds performing worse than the benchmark index were JS Growth Fund (22.21%), Atlas Stock Market Fund (21.86%), Askari Equity Fund (21.67%), JS Value Fund (20.99%), Pakistan Strategic Allocation Fund (20.29%), First Habib Stock Fund (16.53%), Crosby Dragon Fund (16.19%) and HBL Stock Fund (15.39%).

The worst performing conventional equity fund in 2014 was PICIC Energy Fund that posted a return of 8.13% only.

Islamic equity funds

Mufap data shows that seven out of nine Islamic equity funds have been in existence since the beginning of 2014. Five out of the seven Islamic funds outperformed the KSE Meezan Index (KMI-30), which is typically the benchmark index for Shariah-compliant equity funds, until December 30.

KMI-30 Index went up 19.57% between January 1 and December 30.

The best Islamic equity fund was JS Islamic Fund, which posted an absolute return of 45.91% in 2014. It was followed by Al Ameen Shariah Stock Fund (29.01%), Al Meezan Mutual Fund (26.3%), Meezan Islamic Fund (23.87%) and ABL Islamic Stock Fund (20.82%).

Islamic equity funds underperforming the KMI-30 Index were HBL Islamic Stock Fund (18.82%) and Atlas Islamic Stock Fund (14.63%).

Published in The Express Tribune, January 1,  2015.

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