During CY24, Pakistan’s equity market rallied due to macroeconomic stabilization, accommodative monetary policy, and foreign inflows, with the KSE-100, KSE-30, and KMI-30 gaining ~84.36%, 74.47%, and ~70.56%, respectively. The Equity Fund category showed varied performance, averaging ~69.65%, with the top quartile fund at ~119.12%. First Capital Mutual Fund posted a one-year return of ~71.35%, underperforming the category average and benchmarks, retaining its 3-Star rating. As of Dec’24, the Fund had ~84.78% in equities, ~7.91% in cash, and ~7.32% in other instruments. Major sector allocations included Oil & Gas Exploration (~20.08%), Commercial Banks (~11.45%), Fertilizer (~8.29%), Technology (~7.62%), and Oil & Gas Marketing (~9.39%), with ~27.95% in other sectors. Despite diversification, underperformance suggests the need for improved stock selection and portfolio construction. Strengthening alpha generation through tactical sector rotation, valuation frameworks, and risk-adjusted strategies could enhance competitiveness.

Over the three-year horizon, Pakistan’s capital markets faced policy uncertainty, fiscal imbalances, inflationary pressures, and IMF program delays. Interest and exchange rate volatility created challenges, leading to varied Equity Fund performances. Despite this, the category averaged ~108.73%, with the top fund reaching ~213.38%. First Capital Mutual Fund posted a three-year return of ~110.58%, outperforming the category average but trailing the top performer, maintaining its 3-Star rating. As of Dec’24, the Fund had ~84.78% in equities, ~7.91% in cash, and ~7.32% in other instruments. Key sector allocations included Oil & Gas Exploration (~20.08%), Commercial Banks (~11.45%), Fertilizer (~8.29%), Technology (~7.62%), and Oil & Gas Marketing (~9.39%), with ~27.95% in other sectors. While the Fund outperformed the category average, its lag behind the top performer suggests areas for improvement. Enhancing portfolio optimization, sector rotation, and stock selection could strengthen its competitive position in a volatile market.

Over the five-year horizon, Pakistan’s equity markets faced volatility due to macroeconomic imbalances, currency depreciation, and political instability. Despite these challenges, a strong bull run in CY24 saw the KSE-100, KSE-30, and KMI-30 gain ~84.36%, ~74.47%, and ~70.56%, respectively, boosting investor confidence. PACRA evaluated twenty-four Equity Funds, with the category averaging ~130.62% and the top performer reaching ~214.82%. First Capital Mutual Fund posted a ~106.77% return, maintaining its 3-Star rating but underperforming peers. As of Dec’24, the Fund had ~84.78% in equities, ~7.91% in cash, and ~7.32% in other instruments. Major sector allocations included Oil & Gas Exploration (~20.08%), Commercial Banks (~11.45%), Fertilizer (~8.29%), Technology (~7.62%), and Oil & Gas Marketing (~9.39%), with ~27.95% in other sectors. While the Fund lagged behind top peers, its diversified exposure provides a base for improvement. Strengthening stock selection, optimizing sector rotation, and refining risk-adjusted strategies could enhance competitiveness.