Lahore, September 13, 2021 (PPI-OT): NIT Government Bond Fund (or the ‘Fund’) is a low-risk profile fund. NIT Government Bond Fund aims to invest primarily in Government Securities. In line with its stated investment policy, the fund shall invest at least 70% of net assets in securities issued by GOP and reverse repo in securities issued by GOP. It will also place Fund’s allocations with banks having investment-grade ratings and above. The weighted average time to maturity of the Fund shall not exceed 7.5 years. The assigned rating reflects adequate strength of the Fund’s credit and interest rate risk profile.
At the end-Jun’21, most of the government securities were redeemed and the amount has to be invested in banks which has raised the exposure in banks to 64% while it reduced the exposure the government securities to 36%. In later months, the exposure in government securities was in compliance with the investment policy. At the end-Jun’21, ~36% of the Fund’s assets were invested in Government Securities, whereas ~64% of the exposure was maintained in banks rated ‘AA’- or above. The duration of the Fund at the end Jun’21 stood at ~101 days, which has improved since the last review. The standard deviation of the returns of the Fund is 0.46% since inception, which means that the fund has been consistently able to maintain its returns.
This has resulted in a perfect coefficient of variation. The unit holding pattern of the Fund is highly concentrated with the top ten investors representing ~82% of the fund’s assets, out of which ~48% are owned investments which provide a cushion against the redemption pressure. Going forward, the Fund intends to shift its assets to remain in government securities specifically floating rate PIBs. 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