BMA EMPRESS CASH FUND (BECF)

DAILY NAV

10.4501

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 11.02
FY 2013 9.14 8.90
FY 2014 8.47 8.90
FY 2015 8.15 8.20
FY 2016 4.61 5.82


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* 2.06%
*This includes 0.25% of SECP Fee & Govt. Levy
**Management fee is reduced to 0% from 18 November 2016 for
a period of six month


FUND COMMENTARY

The fund earned an annualized return of 2.73% during Feb’17 as against the benchmark of 5.27%, underperformed by 254 bps. The FY17 return of the fund stood at 4.30% against the benchmark of 5.32%. This performance is net of management fee and all other expenses. Standard deviation of portfolio was 0.02%, 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

ECONOMIC OUTLOOK

CPI for Feb‐17 clocked in at 4.2%YoY as compared to 3.7%YoY in the preceding month registering a monthly increase of 0.3%. Resultantly, the average CPI for 8MFY17 stood at 3.9% as against the CPI of 2.48% during the same period last year. The rise in inflation was primarily led by an escalation in perishable food and fuel prices during the month under review. Furthermore, the core inflation measured by non‐food and non‐energy based CPI increase by 5.3%YoY in Feb‐17. The rebound in international oil prices will significantly alter the future CPI forecasts and can have serious repercussions towards the

future course of monetary policy direction where a rise in interest rates cannot be completely ruled from 1HFY18.

During Jan’17 Current Account Deficit recorded at a level of USD 1.19bn taking the 7MFY17 CAD to USD 4.71bn as against a deficit of USD 2.48bn during the same period last year. This can be mainly attributed to 21% YoY jump in trade deficit as the exports declined by 1% YoY while the imports surged by 9% YoY. This has turned the surplus BOP into deficit, despite of increase in FDI and USD 1.0bn Sukuks issue. The BOP position might further deteriorate due to widening CAD, putting pressure on the exchange rate.

The country’s total liquid foreign exchange reserves stood at USD 21.82 bn as of 24th February, 2017; registering a monthly decline of ~2%. The decline in the country’s stock of foreign exchange was mainly led by external debt and loan payments of which majority was attributed to the loan repayment of USD 500 mn to the State Administration of Foreign exchange (SAFE), China.

In the PIB auction conducted during the month, bids worth Rs. 59.73 bn were accepted against the target of Rs. 50 bn where much of the activity remained tilted towards the shorter tenor instrument of 3‐yr PIB The cut‐off yields for 3‐yr 5‐yr and 10‐yr PIBs clocked in at 6 41% 6 90% and 7 94% respectively whilst all bids for 20‐yr PIB were rejected by the SBP.

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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