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  • PICIC INCOME FUND PROVIDES COMPETITIVE RETURNS

    Diunggah oleh

    Rubina Adil
    36 tayangan1 halaman
    PICIC Income Fund is an open-end income fund that aims to provide competitive returns through investments in short, medium, and long-term debt instruments while preserving capital. As of July 2010, the fund had net assets of Rs. 2.3 billion with an NAV per unit of Rs. 100.25. Due to high inflation and liquidity issues, the fund maintained a significant cash position of 60% and invested the remainder in short-term government securities and term deposits with AA rated financial institutions, with an average duration of 41 days. Going forward, the fund intends to focus on shorter government securities and AA rated financial institutions to generate higher yields while maintaining liquidity.

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    Picic Income Fund

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    PICIC Income Fund is an open-end income fund that aims to provide competitive returns through investments in short, medium, and long-term debt instruments while preserving capital. As of July 2010, the fund had net assets of Rs. 2.3 billion with an NAV per unit of Rs. 100.25. Due to high inflation and liquidity issues, the fund maintained a significant cash position of 60% and invested the remainder in short-term government securities and term deposits with AA rated financial institutions, with an average duration of 41 days. Going forward, the fund intends to focus on shorter government securities and AA rated financial institutions to generate higher yields while maintaining liquidity.

    Hak Cipta:

    Attribution Non-Commercial (BY-NC)
    Unduh sebagai PDF, TXT atau baca online dari Scribd
    Tandai sebagai konten tidak pantas
    36 tayangan1 halaman

    PICIC INCOME FUND PROVIDES COMPETITIVE RETURNS

    Diunggah oleh

    Rubina Adil
    PICIC Income Fund is an open-end income fund that aims to provide competitive returns through investments in short, medium, and long-term debt instruments while preserving capital. As of July 2010, the fund had net assets of Rs. 2.3 billion with an NAV per unit of Rs. 100.25. Due to high inflation and liquidity issues, the fund maintained a significant cash position of 60% and invested the remainder in short-term government securities and term deposits with AA rated financial institutions, with an average duration of 41 days. Going forward, the fund intends to focus on shorter government securities and AA rated financial institutions to generate higher yields while maintaining liquidity.

    Hak Cipta:

    Attribution Non-Commercial (BY-NC)
    Unduh sebagai PDF, TXT atau baca online dari Scribd
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    PICIC INCOME FUND (PICIC‐IF)  July 2010 

    Investment Objective: 
    To provide competitive returns to its investors through active investments in a blend of short, medium and long term debt instruments. The Fund 
    aims to preserve capital while maximizing returns through efficient utilization of investment and liquidity management tools.  

    Fund Information  Maturity Profile    Market Review 


    As  per  the  latest  released  Inflation  statis‐
    Fund Type    Open‐end  Duration     41 Days  tics, June 2010 YoY Inflation was recorded 
    Category    Income Fund  at  12.69%.  There  are  significant  inflation‐
    ary pressures on the horizon, with a sharp 
    Inception Date    July 24th 2010  Asset  Allocation         July 2010  reduction in government subsidies, supply 
    side  constraints  and  Ramadan  seasonal 
    Net Assets (July 31st)  Rs. 2.30 billion  Cash  60%  effect. In addition to the inflationary pres‐
    sures there is severe lack of liquidity in the 
    NAV per Unit    Rs. 100.25 
    system.  
    T‐Bills  29% 
    Trustee      CDC 
    Despite the scrapping of the Quarterly PIB 
    Auditor      A.F. Ferguson & Co.  Placement with DFIs  11%  auction  on  July  21st  2010,  government 
    borrowing    from  the  banking  system  re‐
    Benchmark    Average of 6M KIBOR  mains  high  and  is  expected  to  further 
    Others                  Nil  increase  on  account  of  disaster  relief  re‐
    Dealing Days    Monday ‐ Friday  lated expenditure.  
    Cut off time    4:00 pm 
    Asset  Quality  In the 30th July Monetary Policy Statement 
    Pricing Mechanism  Forward pricing   the  State  Bank  of  Pakistan  (SBP)  decided 
    to  increase  the  discount  rate  by  50  bps 
    Management Fee    1.25% per annum  AA+ from  12.50%  to  13.00%,  reflecting  the 
    7% AAA government’s  need  for  future  borrowing 
    AMC Rating    AM3 (JCR VIS)  29% as  well  as  the  SBP’s  response  to  persis‐
    Fund Stability Rating  A+(f) (JCR VIS)  tently high inflation figures.  

    Sales Load                                 Nil 
    Fund Manager    Tauqir Shamshad 
    Fund Strategy 
    AA‐ Due  to  the  possibility  of  an  upward  revi‐
    Fund Performance  64% sion  in  the  discount  rate,  the  Fund  chose 
       to  retain  a  significant  proportion  of  the 
    PICIC‐IF  6M KIBOR  portfolio  in  cash  and  short  term  liquid 
    government  securities  with  an  average 
    Month to Date Return  11.41%*  12.41%**  duration of 41 days, allowing the fund the 
    flexibility,  liquidity  and  minimizing  risk. 
    * Annualized 
    The  remaining  portion  of  the  portfolio 
       ** Avg from 24th July 2010    Key Interest Rates  July 2010  consisted  of  Term  Deposit  receipts    with 
    AA rated Financial institutions. 
    Investment Committee Members 
    KIBOR (6M)*  12.41% 
    Mir Adil Rashid, Chief Executive Officer  This 41 day duration is ideal given that the 
    domestic  liquidity  situation  remains  tenu‐
    T‐Bill Cut‐Off (6M)  12.37%  ous until, as per our expectations, foreign 
    Khashe Lodhi,  Chief Investment Officer  inflows materialize in 4QCY10.  

    Tauqir Shamshad, Head of Fixed Income  PIB Cut‐Off (10Yr)  12.68%  Therefore  going  forward  we  intend  to 


    focus on shorter tenor government securi‐
    ties and investments with AA rated finan‐
    Murtaza Ali Jafri, Research Analyst  cial  institutions  resulting  in  higher  yields, 
    Discount Rate  13.00% 
    whilst  retaining  ample  liquidity  for  meet‐
    Faraz Khan, Manager Risk & Compliance  * Avg from 24th July 2010  ing redemption requests.  
     

    Risk 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.  

    9th floor, Muhammadi House, I.I. Chundrigar road, Karachi‐74000, Pakistan.         UAN: 021‐1111 PICIC (74242)        FAX: 021‐32418055‐56          www.picicamc.com 
    A wholly owned subsidiary of NIB BANK Ltd. 

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