In FY25, the KSE-100 Index posted a strong gain of ~60%, supported by macroeconomic stability, aggressive monetary easing of 1,100 bps by the SBP, and improving investor confidence. This bullish momentum translated into solid performance across the Equity Fund category, which recorded an average return of ~50%, while the top quartile funds delivered up to ~81%. First Capital Mutual Fund, however, underperformed the category with a one-year return of ~45%, falling short of both the average and benchmark, and was consequently downgraded to a 2-Star rating. As of June 2025, the Fund maintained a high equity exposure of ~89%, with remaining allocations in cash (~4.5%) and other instruments (~6.5%). Major sector allocations included Oil & Gas Exploration (~18.92%), Commercial Banks (~18.17%), Oil & Gas Marketing (~9.13%), Technology (~6.18%), and Fertilizer (~5.59%), with the rest spread across other sectors. Despite a diversified sector mix, the Fund’s underperformance highlights inefficiencies in stock selection and portfolio strategy. Enhancing alpha generation through stronger sector rotation, valuation-driven stock picking, and disciplined risk management will be essential for improving long-term competitiveness.

Over the three-year horizon, Pakistan’s capital markets grappled with policy uncertainty, fiscal imbalances, persistent inflationary pressures, and repeated delays in the IMF program. Volatility in interest and exchange rates further added to the market's complexity, impacting investor sentiment and resulting in mixed performance across Equity Funds. Despite these challenges, the category delivered a strong cumulative return of ~153%, with the top-performing fund achieving an impressive ~279%. First Capital Mutual Fund posted a three-year return of ~134%, underperforming the category average and falling significantly short of the top performer, though it retained its 3-Star rating. As of June 2025, the Fund maintained a high equity exposure of ~89%, with remaining allocations in cash (~4.5%) and other instruments (~6.5%). Major sector allocations included Oil & Gas Exploration (~18.92%), Commercial Banks (~18.17%), Oil & Gas Marketing (~9.13%), Technology (~6.18%), and Fertilizer (~5.59%), with the rest spread across other sectors. Despite a diversified sector mix, the Fund’s underperformance highlights inefficiencies in stock selection and portfolio strategy. Enhancing alpha generation through stronger sector rotation, valuation-driven stock picking, and disciplined risk management will be essential for improving long-term competitiveness.

Over the five-year horizon, Pakistan’s equity markets experienced significant volatility driven by macroeconomic imbalances, currency depreciation, and political uncertainty. Despite these challenges, a strong bull run in FY25 restored investor confidence and lifted overall returns. PACRA evaluated twenty-three Equity Funds during this period, with the category delivering an average return of ~184%, while the top-performing fund achieved an impressive ~302%. First Capital Mutual Fund recorded a five-year return of ~150%, maintaining its 3-Star rating but underperforming both the category average and leading peers. As of June 2025, the Fund maintained a high equity exposure of ~89%, with remaining allocations in cash (~4.5%) and other instruments (~6.5%). Major sector allocations included Oil & Gas Exploration (~18.92%), Commercial Banks (~18.17%), Oil & Gas Marketing (~9.13%), Technology (~6.18%), and Fertilizer (~5.59%), with the rest spread across other sectors. Despite a diversified sector mix, the Fund’s underperformance highlights inefficiencies in stock selection and portfolio strategy. Enhancing alpha generation through stronger sector rotation, valuation-driven stock picking, and disciplined risk management will be essential for improving long-term competitiveness.