PACRA Maintains Stability Rating of NAFA Income Fund
|Rating Type||Stability Rating|
The fund's objective is to earn a competitive rate of return while preserving capital to the extent possible by investing in liquid assets.
The rating reflects average credit quality, moderate exposure against interest rate volatility, and diversified sectoral exposure in assets. At end-Jun18, fund's exposure with Government securities was ~4%, exposure towards banks deposits and placement was ~66%, and TFC ~12%. The unit holding pattern of the fund is concentrated with top10 investors representing ~98% of the fund's assets, (of which ~76% are owned investments) which exposes the fund to a low level of redemption pressure.
Going forward the fund intends to maintain its allocation to good quality debt instruments with the remaining assets invested in government securities and cash balance with a minimum rating of 'A' and above. Material changes in the fund's asset allocation strategy, which could negatively impact the fund's credit quality and exposure to interest rate risk, remains critical for the rating.
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.