Meezan Daily Income Plan Delivers Strong Returns, Outperforming Benchmarks

Karachi: Meezan Daily Income Plan (MDIP-I), an open-ended Shariah Compliant Fixed Income Fund, has reported a substantial outperformance against its benchmarks for the fiscal year ending June 30, 2024. The fund, which primarily invests in short-term Shariah-compliant money market instruments, achieved a remarkable return of 21.78%, significantly exceeding the benchmark’s return of 10.10%.

According to information available from the Pakistan Stock Exchange (PSX), the MDIP-I focuses on minimizing credit risk by investing in instruments with a credit rating of at least ‘Double A’ (AA). The fund’s strategy to invest in corporate sukuk and other high-quality short-term securities has proven effective, yielding a gross income of Rs. 26,733 million for the year. The primary sources of this income were profits on bank deposits, placements, and Sukuks, which together contributed Rs. 26,406 million. Despite incurring expenses amounting to Rs. 1,584 million, the fund managed a net income of Rs. 25,149 million.

The net asset value of the fund as of June 30, 2024, stood at Rs. 50.00 per unit, a slight increase from the previous year’s Rs. 49.92, reflecting the fund’s stable performance amid fluctuating market conditions. This steady growth is further evidenced by the fund’s total distribution of Rs. 25,149 million during the period, translating to a payout of Rs. 9.87 per unit, which represents a payout ratio of 19.74%.

In terms of asset allocation, the fund maintained a diversified portfolio throughout fiscal years 2023 and 2024. The most significant holdings were in government-backed securities and guaranteed securities, maintaining zero percent allocation, reflecting the fund’s conservative risk posture. Investments in placements with banks and DFIs, Sukuks, and cash including receivables also showed a careful balance aimed at liquidity and return.

The fund’s stability and attractiveness to investors are underscored by its varied unit holding sizes. As of June 30, 2024, the fund had a total of 34,092 investors, with significant participation across different investment scales, from small-scale investors holding fewer than 10,000 units to large-scale investors with over 500,000 units.

VIS Credit Rating Company has assigned a Stability Rating of A+ (f) to MDIP-I, reflecting the fund’s strong financial health and operational stability. This rating not only attests to the fund’s sound investment strategy and financial prowess but also enhances its appeal to conservative investors looking for reliable income streams.