PACRA Maintains Stability Rating of NAFA Government Securities Liquid Fund
|Rating Type||Stability Rating|
The fund's objective is to generate an optimal return with minimum risk, to provide easy liquidity and a reasonable income to its unitholders by investing primarily in short-term Government Securities.
The rating reflects the strong credit quality of the fund. This emanates from maintaining a high exposure to government securities ~41%. The fund continued to remain heavily invested in T-Bills. Fund's average exposure towards interest rate risk was sizeably minimal. In Jun-18, the average duration of the fund was 13 days. The unit holding pattern of the fund represents moderate liquidity risk as top 10 investors represent 76% of the fund's assets at end-Jun 18, however, the comfort can be drawn from the liquid nature of the investments.
Going forward, the rating remains dependent on maintaining at least 70% allocation towards AAA exposure with portfolio duration not exceeding 45 days. Meanwhile, the remaining assets of the fund must be placed with scheduled banks having very strong credit quality.
NBP Fund Management Limited (Formerly: NBP Fullerton Asset Management Limited), established in 2005, is licensed by Securities and Exchange Commission (SECP) to carry out asset management and investment advisory business. NBP is the largest shareholder of the AMC with a stake of ~54%, followed by Baltoro Growth Fund ~36% stake which they acquired from Alexandra Fund Management Pte. Ltd. The CEO of NBP Fund Management Limited, Dr. Amjad Waheed, also holds a 10% stake in the company.
The company’s nine-member Board of Directors include three independent directors and the CEO. During the year Mr. Mudassir Husain Khan and Mr. Tariq Jamali joined the company’s board as a Non-Executive director, both are the representatives of the bank. The company is currently managing a diversified fund slate of twenty-five funds.