Karachi: The Meezan Balanced Fund (MBF) has reported a positive return of 43.38% for the fiscal year ending June 30, 2024, surpassing its benchmark return of 38.19%. The fund continues to focus on capital appreciation and current income through a diversified portfolio of Shariah-compliant investments.
The MBF operates as a balanced fund that invests in Shariah-compliant listed equity securities and Islamic fixed income products. The fund aims to generate long-term capital appreciation while maintaining acceptable risk levels. It holds a balanced portfolio, consisting of high-quality equity securities and various Islamic income products, including Sukuk, Musharaka, Murabaha instruments, and Islamic bank deposits.
According to information available from the Pakistan Stock Exchange (PSX), the fund manager, Al Meezan Investments, actively manages the portfolio, adjusting allocations between equities and fixed income instruments based on market conditions. During the fiscal year, the average equity exposure was 47.89%, while the remainder was allocated to quality fixed income instruments. The fund maintained significant exposure to the Oil and Gas Exploration sector, increasing investments in response to rising commodity prices and currency devaluation.
In terms of performance, the MBF generated total income of PKR 746.00 million for FY24, a substantial increase from PKR 207.00 million in the previous year. This total income included realized gains of PKR 202.00 million, unrealized gains of PKR 279.00 million, and dividend income of PKR 59.00 million. After accounting for expenses of PKR 92.00 million, the fund's net income amounted to PKR 653.00 million. As of June 30, 2024, net assets stood at PKR 1,913.00 million, up from PKR 1,689.00 million the previous year, reflecting a growth of 13%.
The fund has six non-performing Sukuk, including those from Eden Housing Limited and Hascol Petroleum Limited. However, provisions have been made for some, while ongoing legal proceedings are expected for others. Payments from Shakarganj Sukuk are received regularly, although it is still classified as non-performing.
The net asset value (NAV) per unit increased to PKR 18.36 as of June 30, 2024, compared to PKR 15.60 per unit on the same date in the prior year. An interim cash dividend of PKR 4.00 per unit was distributed, totaling PKR 322.00 million for the year.
The MBF has also set aside PKR 2.00 million for charity, in accordance with Shariah guidelines, reflecting its commitment to social responsibility. As of June 30, 2024, the fund had a diverse investor base, with 5,005 unit holders and a substantial proportion holding less than 10,000 units.
The proxy voting results indicate full support for management resolutions, with 100% of votes cast in favor. This demonstrates the confidence of unit holders in the management's strategic decisions.