FAYSAL ASSET MANAGEMENT LIMITED.
Mar 17 - 23, 2008
Faysal Asset Management Limited (FAML) is an asset management company launched in 2003 within Faysal Bank Group. FAML brings together the collective financial expertise and investment experience of Islamic Investment Company of Gulf, with its extensive and global fund management experience, Faysal Bank Limited, one of Pakistan's premier commercial banks and AKD Securities Private Limited, one of Pakistan's leading financial services firms. The joint venture partners have international expertise of managing funds in diversified markets around the globe. Locally, FAML has got over PKR 8.1 billion under its management as of February 29, 2008 through three diversified open-end mutual Funds namely, Faysal Balanced Growth Fund (FBGF), Faysal Income and Growth Fund (FIGF) and Faysal Savings Growth Fund (FSGF). Its funds under management have increased from PKR 2.8 billion to PKR 7.3 billion during the calendar year 2007, a growth of 163% YoY.
FAML has a strong management team, a research based investment structure and a proven track record of outperforming its benchmark since its inception. A dedicated research team for each fund works under the supervision of internal investment committee, which is headed by the CEO. Due to these inherent strengths of the company, JCR-VIS has upgraded FAML's Management Quality Rating to AM3+ (good quality management).
A brief synopsis on each fund is as follows.
1. Faysal Balanced Growth Fund (FBGF) has an asset composition of up to 70% investments in stocks and a minimum of 30% investments in fixed income products. Its benchmark is the sum of proportionate weights of KSE-100 index (stock portion) and 6-month KIBOR (fixed income portion). The fund was launched on April 24, 2004 and on an average it has given 21% return annually. FBGF endeavors to provide investors an opportunity to earn income and long-term capital appreciation by investing in a large pool of funds representing equity and fixed income investments in a broad range of sectors and financial instruments.
The strength of the fund can really be gauged from its performance in the down turn in the stock market. While the other equity funds have lost a considerable value during the stock market down turns, FBGF has weathered the down turn with minimal damage. The chart given below very clearly explains FBGF's behavior against KSE-100 for the period (July 2006 - December 2007). Academically, risk is a deviation of returns from expected or average returns but an investor always dislikes a downward return than the expected and likes a greater than expected return. That is why FBGF is an excellent option for a moderately aggressive investor because the fund has fairly insulated itself form losing value during bear markets. This fund has a 3 stars performance rating given by JCR-VIS.
As of December 31, 2007, FBGF has a return of 76.9% since inception. During the first half year FY2008, it has outperformed its benchmark by a considerable margin of 3.2%. FBGF posted a return of 4.84% during the first half of FY2008 versus its benchmark return of 1.64%. Average return of the open-ended balanced funds category remained 2.39% during 1HFY2008 as compared to FBGF's return of 4.84%.
2. Faysal Income & Growth Fund (FIGF) is a hybrid income fund with a minimum of 90% investments in the fixed income and up to 10% investments in equities investments. This fund is benchmarked with 6 months KIBOR. The fund was launched on October 10, 2005 and has mostly been beating the benchmark by a clear margin. FIGF seeks to provide risk-averse investors an opportunity to earn a consistent market based income with conservative risk profile while maintaining security of principal as its prime objective. The fixed income portion provides the much needed stability to the portfolio / NAV and equities portion enhances the yield (please see graph).
FIGF has a mandate to invest up to 10% in stocks. The fund is managed in such a way that its exposure in equities is generally well below 10%. Its risk is so prudently managed that entry and entry strategies in the stocks have consistently generated excess returns than its benchmark and other fixed income funds. Due to its unique portfolio mix and an annualized return of 12.75%, FIGF gave 12.75% bonus dividend payout in the year 2007, which is highest dividend payout ever given by any income fund in Pakistan. The asset allocation and potential returns makes FIGF an excellent option for the investors like provident funds, endowment funds and NGOs etc. JCR-VIS has reaffirmed FIGF's fund stability rating of A+ this year as well.
As of December 31, 2007, FIGF has an enviable annualized return of 11.57% since inception. During the first half year FY2008, it has outperformed its benchmark by a considerable margin of 1.17%. FIGF posted an annualized YTD return of 11.18% during the first half of FY2008 versus its benchmark return of 10.01%.
3. Faysal Savings & Growth Fund (FSGF) is the best performing money market fund in Pakistan. It is a no load 100% money market fund specially designed to serve the large corporations who have surplus liquidity and are looking for tax arbitrage options. FSGF seeks maximum possible preservation of capital and a reasonable rate of return by investing in money market and debt securities having good credit rating and liquidity. This fund is benchmarked with 1 month KIBOR and has been outperforming it since beginning.
The fund was launched on May 12, 2007 and is the best performing money market fund with an annualized yield of 10.13% as of December 31, 2007 since its inception. During the first half year ended December 31, 2007, the fund has an annualized YTD return of 9.96% as compared to its benchmark return of 9.60%, thus outperforming its benchmark by 0.36%.
Management: Faysal Asset Management is being run by highly professional and experienced management team. The fund management team has extensive experience of managing large scale mutual funds and stock market investments. The Fund Management Team follows an aggressive yet careful approach and has been highly successful in meeting funds performance vis-‡-vis respective benchmarks. The finance and operations areas are being managed by two qualified and experienced Chartered Accountants and the distribution is being managed by an experienced and senior banker. Due to these management strengths JCR-VIS has assigned AM-3 (good quality) management rating to the AMC.