Karachi: UBL Money Market Fund (UMMF), managed by UBL Fund Managers Limited, reported a robust annual performance for the fiscal year ended June 30, 2024, achieving a 22.00% return, which outpaced its benchmark index by 1.10 percentage points. The benchmark index, consisting of 70% average of 3-month PKRV rates and 30% 3-month average deposit rate of three AA-rated banks, returned 20.90%.

According to information available from the Pakistan Stock Exchange (PSX), the fund's net assets significantly increased from PKR 8.89 billion at the end of FY23 to PKR 15.55 billion in FY24, reflecting a substantial growth of 74.81%. The net asset value per unit also rose from 100.73 to 100.93 during the fiscal year.

During the year, the fund's investment strategy primarily focused on maintaining a high-quality liquid asset profile, with significant allocations towards cash and cash equivalents, which constituted 77% of the total assets by June 2024. This strategic asset allocation shift played a pivotal role in the fund's outstanding performance, especially considering the challenging market conditions characterized by fluctuating interest rates and economic uncertainties.

The State Bank of Pakistan's policy rate adjustments, which saw a reduction of 150 basis points in June 2024, were also a significant factor contributing to the fund's performance. The lower interest rate environment towards the latter part of the fiscal year helped improve the fund’s yield on short-term government securities, further buoying its overall returns.

The fund, categorized under the money market fund scheme, has consistently prioritized investments in short-term government securities to provide its investors with a mix of competitive returns, regular income, and high liquidity. This conservative investment approach has proven effective in navigating the volatile market dynamics, underscoring the fund’s resilience and strategic foresight in asset management.

For investors, the fund's performance is particularly noteworthy, not only because of its yield but also due to its effective risk management strategies that have minimized exposure to high-volatility assets. This prudent management is reflected in the fund's ability to outperform its benchmarks while offering stable and competitive returns to its unit holders.