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INFORMATION TECHNOLOGY
ISLAMABAD Campus
MBO - II
TABLE OF CONTENTS
INTRODUCTION..............................................................................................................2
Khadim Ali Shah Bukhari & Co. Ltd - KASB............................................. ...................3
METHODOLOGY............................................................................................................5
BETA CALCULATION....................................................................................................6
RATIO CALCULATION..................................................................................................6
4.Compound annual growth rate:............................................................................. .6
DATA ANALYSIS..............................................................................................................7
CONCLUSION..................................................................................................................8
INTRODUCTION
Closed-End Fund
Mutual Fund
Mutual funds can invest in many kinds of securities. The most common are cash
instruments, stock, and bonds, but there are hundreds of sub-categories. Stock funds, for
instance, can invest primarily in the shares of a particular industry, such as technology or
utilities. These are known as sector funds. Bond funds can vary according to risk (e.g.,
high-yield junk bonds or investment-grade corporate bonds), type of issuers (e.g.,
government agencies, corporations, or municipalities), or maturity of the bonds (short- or
long-term).
KASB FUNDS
KASB Funds Limited (KFL) was incorporated on January 24, 2005. The company is
licensed by SECP to carry out Asset Management and Investment Advisory Services.
KASB Funds' institutional sponsors are KASB Group and BlackRock Merrill Lynch
Investment Managers (BlackRock) KASB has been as trusted name in the financial
industry for over five decades and its umbrella of financial services includes a brokerage
house, a commercial bank and asset management company.
KASB Funds' institutional sponsors are KASB Group and BlackRock Merrill Lynch
Investment Managers (BlackRock). BlackRock is a premier provider of global
investment management, risk management and advisory services to institutional and
retail clients around the world. As of December 31, 2006, BlackRock's pro forma assets
under management totalled over $1.1 trillion across fixed income, liquidity, equity,
alternative investment and real estate strategies
Pakistan Premier Fund, which was previously known as KASB Premier Fund, was
acquired from Khadim Ali Ali Shah Bukhari-closed end fund, with at least Rs 475 million
fund at hand.
METHODOLOGY
The purpose of the study was the analysis of fund manager performance. The Fund
selected for the study was PAKISTAN PREMIER FUND. The fund is listed in Karachi,
Islamabad, and Lahore stock exchanges. The performance of the fund is calculate through
retrieving its required data from the site, www.Businessrecorder.com. Three years
information i.e. 36 months has been collected to analyze the performance of the fund
within past 3 years. The data collected from the site includes
• Closing stock prices ( specific date standardize for each month i.e.15 )
For analyzing the fund manager performance it is necessary to compute the risk (beta) for
the FUND. Calculation of beta requires the information which was retrived by applying
the formulas
STOCK RETURN
The stock return is being calculated from the Closing rates of the fund for 15th of
each month in 3 years. The formula is being applied for calculating stock return
e.g. C10-C9/C9
MARKET RETURN
Similarly market return is computed on the basis of the index value for the same
dat,e 15th of each month, this shows the market return of the one day in a month
through a formula E10-E9/E9
The calculation of beta is done in order to compute the ratios for the fund and analyze its
performance. Beta (B) is used to measure the risk. I have used two methods to calculate
the risk of the fund. The menthods are
• B= N∑XY - (∑x) * (∑Y)/N * (∑x2)-(∑x)2
• B = (R s,m * Ss) / Sm
RATIO CALCULATION
I have applied 5 ratios to analyze the fund’s performance. The ratios are
1. TREYNOR RATIO : The Treynor ratio is a kind of rating standard.
T = rp - rf /β
3. SHARPE RATIO: it is a measure of the excess return (or Risk Premium) per unit of risk in an
investment asset or a trading strategy
S = E (R - Rf)/ σ
5. SORTINO RATIO: measures the risk-adjusted return of an investment asset, portfolio or strategy
S = R - T / DR
DATA ANALYSIS
From the calculation and computations of the Pakistan premiere fun, it can be analyzed
that the Fun is performing at low risk and less return because after the computation of
Beta β it can be seen that that value of beta is less then zero, β<0, so the fund is
having minimum risk as well as less return
The ratios are calculated so that, the performance of the fund manager gain be seen.
• Treynor ratio does not show any effect in the fund, because this ratio is used to
compare two portfolios.
• Sharpe ratio
• Compound Annual growth rate ratio shows that, the growth of the fund over the
time, which is based on annual basis
• Sortino ratio
CONCLUSION
Due to economic Crisis in Pakistan, the companies are facing problems at high level. The
closed end funds listed in KSE 100 index are also not performing well just because, the
economic crisis has covered the world drastically.
The company may have done better when the economic recession will set aside. The
companies are facing losses. The positive point is the investment made in the company
would comprise of less risks. But at the same time returns over the investment would also
be low.