The Pakistan Credit Rating Agency Limited
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Madiha Sohail

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PACRA Maintains Asset Manager Rating of National Investment Trust Limited

Rating Type Asset Manager
(24-May-24 )
(24-May-23 )
Action Maintain Maintain
AM Rating AM1 AM1
Outlook Stable Stable
Rating Watch - -

National Investment Trust Limited ("NITL" or the "Company") is the oldest AMC which reaps the benefit of being the first AMC in Pakistan. The rating incorporates fund slate diversification, a structured decision-making process, and experienced management team. The rating also takes comfort from a strong control environment and satisfactory governance framework. Given the sponsorship of the Government of Pakistan, the business acumen of the Company is considered strong. Also, the strong equity base and financial profile of the Company bodes well to the rating. During the year, the Asset Management Company (AMC) industry experienced a rise of 37% at the end of CY23, primarily fueled by growth in money market and equity funds, attributed to the prevailing high-interest rates in the market. While, the growth in AUMs of NITL is attributed to NITL’s signature equity fund National Investment Unit Trust (NIUT) carrying the weightage of ~51% in overall AUMs of NITL. The National Investment Unit Trust (NIUT) is the largest equity fund contributing the largest market share of 47.4% in the equity category. The increase in AUMs of NIUT Fund was primarily due to stock market performance. On the other hand, the money market fund’s AUMs continued the momentum and provided support to the AUMs base. The AUMs of the NIT Money Market Fund increased by ~62% to stand at PKR 35.1bln at the end of Dec'23 (SPLY: ~PKR 21.7bln). While, AUMs of the NITL increased by ~28% to stand at PKR 123.2bln at the end of Dec'23 (SPLY: PKR 95.4bln) with the market share of ~5.9%. The overall fund's performance remained satisfactory with majority of the funds performing better and beating the industry average as at Dec’23. The NIT Social Impact Fund under microfinance income category has also outperformed the industry average. The AUMs of NIT Social Impact Fund increased by 26% to PKR 1.3bln at the end Dec'23 (SPLY: PKR 1.03bln). On the financial side, the management fee increased by 12% and stood at 578.2mln at the end of Dec'23 (SPLY: 517.6mln) while the AMC remained profitable with ~PKR 792mln during 6MFY24 (SPLY: ~PKR 352mln) due to unrealized gain on re-measurement of investment and share of profit from associates. The total equity of the Company is reported at PKR 11.7bln at the end of Dec'23 which is the highest equity in the market.
The rating is dependent upon the Company’s ability to sustain its market share and upholding strong investment processes and control environment. Meanwhile, consistent performance of funds compared to benchmark and peers is critical. Any sustained downturn in fund performance and/or significant loss in market share may impact the rating.

About the Entity
National Investment Trust Limited was established in 1962 and is a pioneer in mutual fund industry. The Company’s Board of Directors comprised of fifteen members out of which fourteen are non-executive. Currently, there are five independent directors on board of NITL including one female director. 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 company in Pakistan with a portfolio of sixteen 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 AUMs of the Company stood at 123.2bln (inclusive of private funds-NIT-SEF and NIT-EMOF) at the end Dec'23.

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.