Press Release

JCR-VIS assigns Management Quality Rating of AM2- to National Investment Trust Limited

Karachi, July 8, 2011: JCR-VIS Credit Rating Company Limited (JCR-VIS) has assigned Management Quality (MQ) rating of ‘AM2-’ (AM-Two Minus) to National Investment Trust Limited (NITL). Outlook on the assigned rating is ‘Stable’.

NITL is the oldest asset management company. It also enjoys the largest market share, with Rs. 79.8b in assets under management at the end of December 2010. Historically, the company had been managing only one fund, National Investment (Unit) Trust [NI(U)T]. Following the capital market crisis, two equity funds were launched to support equity market, in addition to which, two income funds, have also been launched in FY10. Unit holding pattern of NI(U)T is well-diversified.

Fund performance of NI(U)T has lagged behind benchmark and returns posted by other open-end equity funds in FY10 and also in prior periods. About one-tenth of net assets of NI(U)T are frozen, restricting active management ability to that extent. NIT-State Enterprise Fund is invested in a few scrips. It is exempted from sector-wise allocation limits and hence appreciated in CY10 by investing more than half its assets in the oil & gas sector. Returns have subsequently been lower on account of decline in share price of key holding. NIT-Equity Market Opportunity Fund is more representative of active management, which has yielded returns in the top quartile of peer group in CY10, though similar performance has not been maintained subsequently.

NIT-Income Fund (NIT-IF) has generated competitive returns while return of NIT-Government Bonds Fund (NIT-GBF) is lower. Presently, with funds allocated to highly liquid and low risk assets, NIT-GBF closely resembles other money market funds. NIT-IF, while structured as an income fund, also mirrors NIT-GBF in its asset allocation, given the current market conditions.

Management decision making is routed through an Investment Committee (IC) which comprises senior management personnel including Fund Managers. The investment decisions are based on input from research department. However, the investment decision making process could benefit from greater representation of investment related personnel, including research & risk.

For further information on this rating announcement, please contact Ms. Sobia Maqbool, CFA (Ext: 506) or Ms. Sabeen Saleem, CFA (Ext: 510) at 35311861-70 or fax to 35311872-3.


Faheem Ahmad
President & CEO

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited (VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.VIS , the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report.VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2011 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .