Press Release
VIS Assigns Reaffirms Fund Stability Rating of NIT Islamic Money Market Fund
Karachi, December 29, 2022: VIS Credit Rating Company Limited has reaffirmed the Fund Stability Rating (FSR) of NIT Islamic Money Market Fund (NIMMF) at AAA (f) (Triple A (f)). FSR of AAA depicts highest degree of stability in NAV. Risk is negligible with very low sensitivity to changing economic conditions. Previous rating action was announced on May 26, 2022.
NIT Islamic Money market fund, recently established in Sept 2021, is an open ended Shariah compliant money market scheme with an objective to generate competitive returns for its investors through deploying investments in short-term and low risk oriented Shariah compliant investment avenues. The fund’s Investment Policy Statement (IPS) observes a conservative risk profile where it restricts the fund to take exposure in avenues rated above AA. As of October’ 2022, net assets under management grew to Rs. 5.2b (June’22: Rs. 2.6b) owing to higher investor appetite in the interest rate driven market.
During 10MFY22 (Since inception) and the current 4MFY23 (YTD), the fund’s actual asset allocation majorly remained compliant to the requisites of the offering document and VIS criteria. On monthly average basis, fund’s investment portfolio remained concentrated in cash balances in high rated banks (92%). Credit quality requisites of the fund remained in line with the operational policy of the fund, since its inception, with around 86% (12M average) exposure in AAA rated issue/issuer. The fund majorly complied with VIS Criteria with some minor breaches noted in terms of credit quality during the review period.
Weighted average maturity (WAM) of the fund is capped at 90 days; while time to maturity of any asset shall not exceed 6 months as per the fund’s IPS. On average, WAM and average duration of the fund was well below the defined requisites. Liquidity profile of the fund garners strength from majority of fund’s assets parked in liquid assets and high retail concentration of 96%. Sustainability of the fund’s performance against its benchmark and peer average will remain important for the rating going forward.
For further information on this rating announcement, please contact Ms. Asfia Aziz (Ext: 212) at 35311861-70 or email at info@vis.com.pk
Javed Callea
Advisor
Applicable rating criteria: Fund Stability Ratings (December 2020)
https://docs.vis.com.pk/docs/FundstabilityRating.pdf
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