BMA EMPRESS CASH FUND (BECF)

DAILY NAV

10.3870

LATEST FMR

FUND OBJECTIVES

The BMA Empress Cash Fund is a professionally managed cash fund, which aims to minimize risk, maximize liquidity and generate a competitive rate of return. This will be achieved by concentrating portfolio allocation in AA rated banks and short duration sovereign rated securities.

FUND RETURNS

YearReturnsBM
FY 2012 11.32 11.00
FY 2013 9.14 8.87
FY 2014 8.47 8.91
FY 2015 8.15 8.13
FY 2016 4.61 5.83


FUND DETAILS

Fund TypeOpen End
Category Money Market Fund
Inception Date 12-Nov-09
Benchmark 3M Bank Rate
Dealing Days Monday-Friday
Cut‐off time 4:00 PM
Pricing Mechanism Forward
Management Fee 0.75%
Front end Load upto 1%
Back End Load Nil
Fund Stability Rating AA+ (F) (JCR)
Risk Profile Low Risk
Listing KSE
Trustee MCBFSL
Auditor A. F. Fergusons & Co.
Transfer Agent Technology Trade
Legal Advisors KMS Law Associates
Management Quality Rating AM3
Expense Ratio 2.28%
This includes 0.07% of SECP Fee & Govt. Levy


FUND COMMENTARY

The fund earned an annualized return of 3.47% during Aug’16 as against the benchmark of 4.03%, underperformed by 0.56 bps. The FY17 return of the fund stand at 3.70% against the benchmark of 4.03%, hence posted an underperformance of 0.33 bps. This performance is net of management fee and all other expenses. Standard deviation of portfolio was 0.01%, reflecting the stable nature of the fund’s income. Going forward, we will maintain investment in shorter tenor instruments to avoid interest rate risk.

PORTFOLIO RATING PROFILE

becf-pie-oct-2016

ECONOMIC OUTLOOK

CPI for Aug’16 registered a decline of 0.56% MoM to clock in at 3.56% against the CPI of 4.12% for July’16. Higher than anticipated fall in overall CPI index was primarily due to the 6.5% fall in the prices of perishable products which led to a decline of 0.9% in food inflation in Aug’16.

The country’s current account balance further worsened in July’16 as it stood in deficit by US$ 591mn against the deficit of US$ 234mn in July’15. The current account deficit was exacerbated by a 20%YoY decline in foreign worker’s remittances as they stood at US$ 1.33bn in July’16. Similarly, the trade deficit also contributed to the worsening current account deficit as it widened to US$ 2.1bn against US$ 1.76bn in July 2015 owing to 12%MoM decline in textile exports. We eye a further deterioration in the country’s current account balance courtesy as CSF receipts have stalled and regular IMF inflows are not available any more due to the completion of the program. Therefore, with repayments to IMF starting from FY18 and any upward correction in commodity prices can further exacerbate the current account deficit.

The country’s foreign exchange reserves stood at US$ 23.04bn as on 26th Aug, 2016. The State Bank of Pakistan made payments of US$ 34mn during the month under review on account of external debt servicing. Going forward, we eye stabilization in the for eign exchange reserves primarily due to aforementioned conclusion of IMF program.

In the PIB auction held during the month; bids worth Rs. 319.12 billion were received against the target of Rs. 100 billion and the maturity of Rs. 281.30 billion. The cut‐off yields for 3 years, 5 years and 10 years remained unchanged at 6.21%, 6.70%, and 7.80%, respectively, while no bids were received in 20 year tenor.

FUND MANAGERS

Disclaimer: This publication is for informational purposes only and nothing herein should be construed as a solicitation, recommendation or an offer to buy or sell any Fund. All investments in mutual funds are subject to market risks. The NAV based prices of units and any dividends/returns thereon are dependant on forces and factors affecting the capital markets. These may go up or down based on market conditions. Past performance is not necessarily indicative of future results.

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