BMA CHUNDRIGAR ROAD SAVINGS FUND (BCSF)
The BMA Chundrigar Road Savings Fund seeks to provide its investors with an attractive rate of return by investing in all fixed income and money market instruments of medium risk and short duration. The fund will seek to maintain a rupee weighted average maturity for the investment portfolio of not more than 5 years.
|Fund Type||Open End|
|Category||Aggressive Income Fund|
|Benchmark||1 Year KIBOR|
|Cut‐off time||4:00 PM|
|Front end Load||upto 1%|
|Back End Load||Nil|
|Fund Stability Rating||A+ (F) (PACRA)|
|Auditor||EY Ford Rhodes, Chartered Accountants|
|Transfer Agent||Technology Trade|
|Legal Advisors||KMS Law Associates|
|Management Quality Rating||AM3|
|*This includes 0.40% of SECP Fee & Govt. Levy|
In Oct‐18, the Fund posted an annualized return of 6.06% against benchmark of 10.01%, underperformed by 395bps. The fund was mainly invested in high yield bank deposits equivalent up to 89% while exposure in TFCs was 7.45% at month’s end. At present market is expecting further interest rate hike due to inflationary pressure. The standard deviation of the portfolio was 0.09%, reflecting stable nature of the fund. BCSF is insulated against value erosions since it has minimal exposure in long term maturity instruments. The total portfolio maturity was 127 days at the end of the month. The BCSF intends to remain invested in liquid assets which can be deployed in high yielding assets class once the interest rate reversal completes its cycle.
PORTFOLIO RATING PROFILE
Inflation rate touched four years’ highest level of 7% in October 2018 due to sharp depreciation in rupee against dollar and massive increase in gas prices. CPI for the month of Oct‐18 increased to 7.00%YoY compared to an increase of 5.1%YoY in the previous month. Core inflation rose by 8.20%YoY, from 8.00%YoY increase in the previous month. Sequential 4 months FY19 CPI increased by 5.95% compared to 3.50% SPLY.According to PBS data, the September‐18 trade deficit was USD 2,703 million compared to USD 2,975 million in August‐18, decreased by 9.16%. During the month of September, exports were USD 1.73 billion against the imports of USD 4.43 billion. The 3 months’ sequential trade deficit for FY19 stood at USD 8.87 billion compared to USD 9.01 billion SPLY.Foreign exchange reserves were at USD14.18 billion in the last week of October, 2018, as
reported by the SBP. These were 4.9% lower than previous month where the FX reserves stood at USD14.92 billion. The depletion is being noted in the FX reserves held by the SBP, which was 13.9% lower than previous month, while reserves held by banks were only 1.9% lower, showing relative stability.
During the month of October, the SBP sold T‐bills worth 3,257.89 billion through its monthly auctions. The cutoff rate of 3 months paper was increased to 8.79% from 7.75% last month, in alignment with the increase of SBP Policy Rate in September‐18. In addition, SBP rejected all the bids received in its monthly PIB auction due to lackluster participation. Market is awaiting SBP’s Monetary Policy Statement in the month of November and expecting another interest rate hike by the SBP in order to curb the expected spill out inflationary effects of recent devaluation coupled with energy and commodity price increases.
Disclosure: The scheme has maintained provisions against Workers’ Welfare Fund (WWF) liability to the tune of Rs. 142,576 as of Jun 30 , 2015 . Had the provision not been made, the NAV per unit/percentage return of the Fund would be higher by Rs. 0.002/0.02%. Details are specified at note 8.1 to the latest period ended report of Jun 2016. Performance data does not include the cost incurred directly by an investor in the form of sales load etc. Effective from July 1, 2015 no provision is being made as mutual funds have been excluded from levy of WWF vide Finance Act 2015.