Agah Mutual Fund celebrates 10 years of asset management!
On August 08, 2018, Agah Mutual Fund, a mutual investment fund managed by Agah Group, celebrated its 10 years of asset management achievements with an astonishing cumulative return of +3,200%! Agah fund was among the very first Iranian investments funds which established right after the ratification of primary rules of law addressing that Iran Capital Market can grow by bringing new instruments in to play. “Off the charts” performance of Agah Mutual Fund is an excuse for this article demonstrating the latest status of Iranian Mutual funds.
After the better than expected performance of Iran Capital Market, which was most indebted to the rise of USD/IRR in the nation’s FX market, the cash figure injected to mutual funds – especially the pure equity type saw a meteoric rise. The total AUM of all Iranian equity funds jumped from IRR 8,733.96 bn on 07 Jul to IRR 10,154.71 on 07 Aug, recorded a rise of more than 16%.
Now, we take a look at the size of this market by depicturing the total AUM pooled via these investment funds and the diversity of fund types active in the Iranian market. As of Aug 07, 2018 the total AUM of Iranian mutual funds reached IRR 1,477,002.18 bn (USD 35.17 bn) and the dispersion of the types are as below:
Since Agah Mutual Fund (see the factsheet here) placed amid the pure equity type, we shall divert our attention to the said sector. Despite their tiny part in the value, over the time, pure equity mutual funds returned their investors handsomely. Out of 85 pure equity mutual funds, only 5 performed negatively for the last year (the rest have yielded their investors between 0.23% to 118%). Agah mutual fund delivered an annual return of 81.28% in this statistical society and according to SEO officials, it is the first Iranian fund with the highest performance since inception and yielded +3,200% in a matter of 10 years. The below table demonstrates its performance in more details:
Finally, its time to evaluate the asset allocation part of the story. What caused these mutual funds to perform surprisingly perfect? To seek the answer we shall first see the industry/sector allocation percentage of these funds on average.
A huge part of each Iranian pure equity investment fund is allocated to commodity-based industries. According to the below chat the top three industries which have the most allocated resources are:
- Metals (13%)
- Chemicals (11%)
- Oil Products (5%)
As can be seen, these sectors’ performances are highly dependent on several domestic and international factors:
- Global prices of commodities and crude oil;
- USD/IRR translation rate for companies’ export revenues;
- The ability of those firms to export; and
- The domestic commodity market supply/demand
Agah Fund was not different to all its peers, however, the share of each industry was a little unlike the others which made its exposure to market fluctuations a bit rougher:
DISCLAIMER: This report has been prepared and issued by Agah Brokerage Firm on the basis of publicly available information, internally developed data and other sources believed to be reliable. The information contained herein is not guaranteed, does not purport to be comprehensive and is strictly for information purposes only. Agah does not assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions. Any expressions of opinions are subject to change without notice.
To contact reporters: Inter@agah.com