Lahore, September 13, 2021 (PPI-OT): 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 risk-adjusted returns and would invest in various instruments of varying maturities depending on the yields available, after adjusting for risk levels. The maximum weighted average time to maturity of the Fund will be 4 years. At end Jun’21, ~55% of the Fund’s assets were placed with an AAA-rated bank, which gives rise to concentration risk. Whereas, ~23% of Funds were allocated to sukuks primarily rated ‘AA’ and above and ~22% of funds were allocated to GoP Ijara Sukuk.
The Fund has a WAM of 693 days, which exposes it to high interest risk. The unit holding pattern of the Fund is concentrated with the top ten investors representing ~56% of the Fund’s assets, out of which ~20% 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.
For more information, contact:
Analyst,
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore, Pakistan
Tel: +92-42-5869504-6
Fax: +92-42-5830425
Email: hammad.rashid@pacra.com
Website: www.pacra.com