Press Release

VIS Reaffirms Fund Stability Rating of NIT Social Impact Fund

Karachi, December 22, 2023: VIS Credit Rating Company Limited has reaffirmed the Fund Stability Rating (FSR) of A+(f) (Single A Plus (f)) to NIT Social Impact Fund (NIT-SIF). FSR of ‘A+’ signifies moderate degree of stability in NAV. Risk factors may vary with possible changes in the economy. The previous rating action was announced on December 30, 2022.
NIT Social Impact Fund is an open-end microfinance sector income fund with objective to generate returns through investment in strategic and financially sustainable social initiatives such as women empowerment, agriculture value chains, micro small medium enterprises development, and low-cost renewable energy etc. via microfinance banks/institutions/providers. The fund's policy mandates investments in securities rated 'BBB' or higher. These securities mainly include TDRs, Money Market Placements (COIs, LOPs, CODs), Commercial Papers, Repo/Reverse Repo, TFCs/Sukuks with microfinance banks, social Impact Instruments issued by other FIs and Government Debt Securities. The fund’s net assets as of Jun’23 grew to Rs. 1.01b from Rs. 0.73b in Jun’22.
Ratings are underpinned by the fund’s asset allocation and credit quality. The fund has adhered to the asset allocation guidelines set forth in the offering document. Majority of the fund’s portfolio comprises A+ (average 87.13% in FY23) and AA- (average 8.84% in FY23) rated securities. However, concentration risk is heightened with 80.73% of investment portfolio invested in a single bank in terms of cash and TFCs.
As of Jun’23, the fund had 225 investors, with retail investors making up 97.78% of the total investors, while corporates and affiliated parties comprise the remainder. The AUMs of the top 10 investors represented approximately 82.42%, depicting high concentration risk. The fund demonstrated a strong performance during the review period, with a total return (including dividends) of ~18.60% in FY23, outperforming both the benchmark return and the peer average. However, on a month on month basis the fund generated an average return of 17.19%, underperforming the benchmark of 18.35%. Maintenance of performance and reduction in concentration risk will be important for rating going forward.
For further information on this ratings announcement, please contact Mr. Muhammad Amin Hamdani (Ext: 217) or the undersigned (Ext: 208) on 021-35311861-64 or email at info@vis.com.pk.



Syed Asif Ali
Executive Director

Applicable Rating Criteria: Fund Stability Ratings
https://docs.vis.com.pk/docs/-FundstabilityRating.pdf

VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf

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