After posting double digit return for six consecutive years, the benchmark KSE-100 index returned 9.84 percent in FY 2015. Global markets this year were marred by decline in oil prices and fears of a slowdown in China. Mutual funds and foreign investors, both were net sellers on PSX during the fiscal year with $9.4 million and $285.9 million outflows respectively. However, stocks in Pakistan still managed perform well as corporate earnings and CPEC prospects kept investors interested.

On the fixed income side, the returns remained low as SBP during the year cut the target policy rate by 100 basis points to 5.5 percent because of low inflation and to spur growth in the country. Globally also monetary easing was witnessed across the board with some countries even going into negative interest territory.

The 242 Mutual Funds in Pakistan, as reported by MUFAP (Mutual Funds Association of Pakistan), had average return of 6.87 percent. Highest return was posted by funds which invested in gold. Gold prices staged a big rally this year on the back of global market fears and as a risk off trade. UBL Gold Fund was the leader here with 13.56 percent return.

Conventional equity gave out an average return of 8.47 percent compared to 9.84 percent of benchmark KSE-100 index. Alfalah GHP Stock Fund was the best performer in this category with average return of 14.8 percent. AKD Opportunity Fund was the second best performer in this category with 14.13 percent return.

Shariah compliant equity funds return averaged at 10.31 percent. In this category too, Alfalah GHP’s Islamic Stock Fund took the top spot with 20.33 percent return. In the Asset allocation category again it was Alfalah GHP’s Value Fund that performed better than all its peers with 18.33 percent return. According to Alfalah GHP’s fund manager report, they took heavy bets on the cement sector in the starting of the year and switched to oil stocks in the middle of the year, as international oil prices rebounded.

This strategy enabled them to generate significant alpha for their investors.

Income funds posted average return of 7.35 percent. PIML Income Fund was the best performer in this category as it posted a stellar return of 11.70 percent.

In the Money Market category the top spot went to NAFA Money Market Fund as it generate 6.34 percent return for its investors versus average return of 4.78 percent of the same category.

Balanced funds, which are a mixture of equity and fixed income investments, returned 6.83 percent on average. NAFA Multi Asset Fund was the top pick, with 8.69 percent return according to data compiled by MUFAP.