Karachi, December 30, 2022 (PPI-OT):VIS Credit Rating Company Limited has assigned initial 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.
NIT-SIF, recently launched in May 2022, is an open-ended microfinance sector income fund scheme with an objective to maximize financial returns for its impact investors by leveraging on the strength of rated asset pool of micro-finance sector. The fund’s Investment Policy Statement (IPS) stipulates a moderate risk profile, requiring it to invest in instruments and investment avenues rated at least ‘BBB’. Avenues primarily include TDRs, Money Market Placements (COIs, LOPs, CODs), Commercial Papers, Repo/Reverse Repo, TFCs/Sukuks with all microfinance banks, Social Impact Instruments issued by other FIs and Government Debt Securities. As of Oct’22, net assets under management grew to Rs. 1.1b (May’22: Rs. 737m) with further growth envisaged over the rating horizon.
Assigned ratings take into account the fund’s actual asset allocation and credit quality requisites since inception. The fund’s actual asset allocation majorly remained compliant to the requisites of the offering document during the previous six months. On a six-month average since inception, 92% of the fund’s investment portfolio remained in cash balances, with the remainder deployed in TFC (U Microfinance Bank TFC rated as ‘AA-’). On the credit quality front, since its inception, credit quality requirements have remained consistent with the operational policy, with the majority of the fund’s size (average 92%) concentrated in ‘A+’ rated issue/issuers.
Average Weighted Average Time to Maturity of the fund for the past six months stood at 60 days, which is consistent with the investment policy. Although top-10 investor concentration is elevated at 79% at end-Sep’22, liquidity profile draws comfort from high retail concentration (96%) with majority of the assets parked in cash balances. The fund outperformed its benchmark in the review period since inception. The fund’s performance against its benchmark and peer average will continue to be important for rating in the future.
For more information, contact:
Director Compliance and Rating Analytics,
VIS Credit Rating Company Limited
VIS House, 128/C, 25th Lane off Khayaban-e-Ittehad,
Phase VII, DHA, Karachi, Pakistan
Tel: +92-21-35311861-72
Fax: +92-21-35311873
Email: bilal@jcrvis.com.pk
Website: https://www.vis.com.pk/