The Pakistan Credit Rating Agency Limited
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Muhammad Junaid

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PACRA Maintains Stability Rating of NIT Islamic Income Fund

Rating Type Stability Rating
(11-Mar-22 )
(10-Sep-21 )
Action Maintain Maintain
Long Term AA-(f) AA-(f)
Short Term - -
Outlook Stable Stable
Rating Watch - -

NIT Islamic Income Fund (or the 'Fund') is a medium-risk profile Fund. The rating reflects the risk profile of the Fund with considerable holding of cash and bank balances which reinforce the liquidity profile. The Fund aims to maintain a diversified portfolio to generate superior returns. According to rating criteria, the Fund shall place 15% of its net assets in 'AAA' rated avenues to maintain the assigned rating. At end Dec'21, ~33% of the Fund's assets were placed with in banks rated 'AA+' and above. Whereas, ~33% of net assets were invested to majorly corporate sukuks primarily rated 'AA' and above. Further,~18% of AUMs were allocated to GoP Ijara Sukuk. The Fund has a WAM of 677 days. The average duration of the Fund stood at 58 days at-end Dec'21, limiting the Fund's exposure to interest rate risk. The unit holding pattern of the Fund is moderately concentrated with the top ten investors representing ~46% of the Fund's assets, out of which ~19% are owned investments which provide a cushion against the redemption pressure.
Going forward, the Fund is expected to maintain its current strategy to remain in high rated banks and sukuks. Material changes in the Fund's asset allocation strategy, impacting its credit quality and/or exposure to interest rate risk, would affect the rating.

About the Entity
National Investment Trust Limited was established in 1962 and is a pioneer in the mutual fund industry. The Company’s Board of Directors currently comprises ten board members out of which nine are non-executive. Mr. Adnan Afridi, CEO/MD who joined in Feb'19 holds profound experience in the financial services and capital markets. Mr. Manzoor Ahmed is the COO and has a successful track record of managing the operations and investment portfolio of the Company. The Company is currently one of the largest asset management companies in Pakistan with a portfolio of thirteen open-end funds which includes two non-public funds namely NIT-SEF and NIT-EMOF, two voluntary pension schemes, and an exchange-traded fund. The assets under management of the Company stood at ~PKR 96,759mln (including SEF & EMOF) end-Dec'21.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.