Kifayah Strategy of Mutual Funds (SoF)

About Strategy of Funds

Mutual Funds range from low risk Money Market and Income Funds to high risk Equity Funds. Money Market and Income Funds are suitable for low risk investors requiring regular monthly income etc. These funds invest with Shariah Compliant Banks, Shariah compliant windows of Conventional Banks and Corporate and Government Sukuks. Equity Funds are suitable for investors looking for higher returns who have the appetite to take higher risk. These Funds invest in quality stocks listed at Pakistan Stock Exchange.

Historically, tracing back to 15 years, investment in KSE-100 index has provided a return of ~15% annually. This is the normal or intrinsic return of the market or equity funds, primarily based on growth and inflation. These returns however come with extreme volatility with long periods of gaining years followed by some loss-making periods. With Kifayah Strategy of Funds (SoF), the portfolio of mutual funds is rebalanced periodically between Equity and Money Market Funds to maximise returns. This active switching between funds is based on research, timings, and current market situation in order to cut down on losses and optimise on returns.

Kifayah Investment Management is an authorised distributor for mutual funds under the management of Al Meezan Investment Management Limited.

Financial Year	KMI-30 Index (Points)	KMI-30 Returns	Kifayah SoF Returns
FY 2017	78,598	18.8%	36.3% (Testing)
FY 2018	71,060	-9.6%	-2.6% (Testing)
FY 2019	54,119	-23.8%	29.9% (Testing)
Jul to Dec 2019	66,032	22.0%	35.4% (Testing)
Jan to Jun 2020	54,995	-16.7%	-20.7% (Actual)
CAGR (4 years)		-4.5%	16.7%

Investments in Mutual Fund through our platform gives the following advantages at no cost to our investors:

• Independent advice
• Tax Credit
• Choice of multiple funds
• Access to our research
• Free for investors (our service fee is paid by respective fund manager)

This product is suitable for investors who are seeking:

• Long-term wealth creation solution
• To save taxes
• Diversified investment that aims for capital appreciation by investing in Shariah compliant equity securities
• High risk and return potential
• To cover themselves against inflation, and falling Rupee value
• To invest for long term
• Have good understanding of investing in stocks

Key Features — Meezan Islamic Fund

Fund Name	Meezan Islamic Fund
Fund Type	Open-end Islamic Equity Fund
Risk Level	High
Date of Inception	8 Aug 2003
Fund Size (Jun 2019)	Rs. 25.7 Billion
Objective	The Fund seeks to maximise total investor returns by investing in Shariah Compliant equities focusing on both capital gains and dividend income.
Benchmark	KMI-30 Index
Minimum Investment	Rs. 5,000 (and Rs. 1,000 thereafter)
Lock-in Period	None
Management Fee	2%
Entry Load	2%
Exit Load	Nil
Fund Category	Equity

Fund Performance Highlights

MIF: 10 Year CAGR (FY10-FY19)	16.61%
KMI-30 Index Returns	17.72%

Risk Measures (June 2019)

Standard Deviation	35.3%
Sharpe Ratio	(0.65)

*12-month trailing

This product is suitable for investors who are seeking:

• Protection of investments from stock market volatility, while providing diversification to the overall investment portfolio
• Long-term regular income solution
• Moderate risk and return potential

Key Features — Meezan Islamic Income Fund

Fund Name	Meezan Islamic Income Fund
Fund Type	Open-end Islamic Income Fund
Risk Level	Minimal
Date of Inception	15 Jan 2007
Fund Size (Jun 2019)	Rs. 9,466 Million
Objective	To provide investors with a high and stable rate of current income consistent with long-term preservation of capital in Shariah compliant way. A secondary objective is to take advantage of opportunities to realise capital appreciation.
Benchmark	6 months average deposit rates of 3 A rated Islamic banks
Weighted Avg. Maturity	2.18 Years
Cut-off Time	4:00 PM
Management Fee	6.5% of gross earnings (min. 0.5% of avg. annual net assets; max. 1.5% of avg. annual net assets)
Entry Load	0.5%
Exit Load	Contingent load for Type C investors
Fund Category	Income

Fund Performance Highlights

3-month Return

10.82%

This product is suitable for investors who are seeking:

• Parking avenue for short-term funds
• Stable and Halal returns avoiding volatility of both long-term fixed income securities and stock markets
• Low risk and return potential

Key Features

Feature	Meezan Cash Fund	Meezan Rozana Amdani Fund
Fund Type	Open-end Islamic Cash Fund	Open-end Islamic Cash Fund
Risk Level	Minimal	Low
Date of Inception	15 Jun 2009	28 Dec 2018
Fund Size (Jun 2019)	Rs. 8,846 Million	Rs. 22,960 Million
Objective	To seek maximum possible preservation of capital and a reasonable rate of return via investing primarily in liquid Shariah compliant money market and debt securities.	To meet liquidity needs of investors by providing them a daily payout through investment in Shariah compliant money market instruments.
Benchmark	3 months average deposit rates of 3 AA rated Islamic banks	3 months average deposit rates of 3 AA rated Islamic banks
Weighted Avg. Maturity	0.13 Year	14.84 Days
Cut-off Time	4:00 PM	4:00 PM
Management Fee	1%	5% of gross earnings subject to min. cap of 0.25% and max. cap of 1.00% of net assets p.a.
Entry Load	Nil	0%
Exit Load	0.1% if redemption within 3 days	0%
Fund Category	Money Market	Money Market

Fund Performance Highlights

	Meezan Cash Fund	Meezan Rozana Amdani Fund*
Latest 3-month Return	10.37%	11.12%

*3-month returns

Strategy	Fee
Kifayah Strategy of Funds (SoF)	1% of portfolio on achievement of 15% gross profit target; or 10% of profits; or Rs. 42,000 per annum or 1% of portfolio per annum, whichever is higher
Minimum Investment	Rs. 3 million