Award winning Capitec Asset Management secured commendable returns at double-digit rates from investments out of its two open-ended mutual funds in FY22, which was much higher than from most other instrument vehicles.
Its Shariah-based fund, Capitec Padma P.F. Shariah Unit Fund generated 21.8 per cent income, earning the second position among the top 10 best performing open-ended MFs in terms of returns for FY22, according to an analysis by EBL Securities.
Such high income from money injected into the capital market at a time when the overall market performance was not as promising demands explanation.
The fund had its highest income, 62 per cent, derived from capital gains while 16 per cent came from dividends and the rest from interest income.
Not only did the asset manager show expertise in tapping into opportunities to make profits from selling securities in the highly-unpredictable market, it also achieved a 14 per cent growth in capital gains year-on-year to Tk 41.30 million in FY22.
The fund's dividend income also had a 23 per cent rise to Tk 10.49 million in FY22, compared to the previous fiscal year, which means the securities chosen for investments paid good amounts of cash dividends for the year.
The investment in Doreen Power proved to be the most benefiting as the fund's capital income from the security alone was Tk 11.30 million in the financial year.
In the 12 months to July 2022, the stock traded at Tk 65 to Tk 93 per share. The fund manager bought its holdings at Tk 67.66 each share on an average during the period and offloaded those at an average of Tk 79 each share, the FE found analyzing its financial statements.
The team of professionals, who operate the mutual funds, have the potentials to weigh on investment risks and ensure proper timing for bets, said M. Mahfuzur Rahman, managing director of Capitec Asset Management.
The company has a dedicated research team "who analyses the performance and prospects of companies and identifies eligible securities to invest," he added.
Of the other stocks that helped achieve high capital gains, Tk 9.43 million was from SME stock Nialco Alloys, Tk 8.36 million from JMI Hospital Requisite, and Tk 4.47 million from Baraka Patenga Power.
However, if return rate is considered, the Shariah-based fund reaped highest profit -- at 615 per cent - from Sonali Life Insurance.
The fund's purchase of 20,000 IPO shares of the insurance company at Tk 10 each resulted in a profit of Tk 1.23 million.
Sonali Life Insurance stock debuted in June 2021. On an average, each share was sold at more than Tk 71.
In the year, the fund also incurred capital losses for investments in Orion Pharma, Khulna Power, BBS Cables, and Mir Akther, amounting to around Tk 23 million.
A large chunk of the fund's dividend income was earned from Beximco Green Sukuk -- Tk 2.44 million, and Grameenphone -- Tk 1.33 million.
Another mutual fund managed by Capitec Asset Management and named Capitec Popular Life Unit Fund posted 14.90 per cent return for FY22, acquiring the seventh position among the top performers of open-ended MFs.
This fund saw a 19 per cent year-on-year drop in capital gains in FY22 but still its profit from share transactions accounted for 67 per cent of its total income that year.
The fund counted losses from investments in BATBC, BBS Cables, LafargeHolcim, Mirkther, Orion Pharma and Power Grid.
On the other hand, dividend income more than doubled to Tk 14.64 million in FY22, compared to the previous fiscal year.
It earned Tk 4.25 million from Dutch-Bangla Bank, Tk 1.27 million from Rupali Life Insurance and Tk 3.92 million from Vanguard AML BD Finance in the form of dividends.
Capitec is developing and expanding its business with integrity and compliance to provide the highest returns to investors, said Mr Rahman.
Presently, the fund manager operates three open-ended mutual funds equivalent to Tk 1.08 billion in assets and representing 1.93 per cent of the total assets under management of open-ended mutual funds as of FY22.
The asset manager is in the process of launching a close-ended mutual fund of Tk 2 billion, named 'Capitec Grameen Bank Growth Fund,' Mr Rahman said.
Capitec Asset Management won the prestigious 'Independence Golden Jubilee Award-2022', in the best asset manager category for its outstanding performance in the stock market.
The managing director is optimistic about the company being able to continue outperforming the market, even while navigating adverse situations, and generating healthy returns for investors in the future.
The Shariah fund disbursed 12.5 per cent cash dividend to unit holders for FY22 while the Life fund paid out 15 per cent cash dividend for the year.
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