Karachi, December 31, 2021 (PPI-OT):VIS Credit Rating Company Ltd. (VIS) reaffirmed Management Quality Rating of ‘AM1’ (AM-One) to National Investment Trust Limited (NIT). The assigned rating of ‘AM-1’ (AM-One) signifies that the asset manager exhibits excellent management characteristics. Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on December 31, 2020.
Assigned rating reflects NIT’s strong niche position with demonstrated support as a seasoned AMC with a sound performance track. The ratings take into consideration its asset-management franchise, market position as one of the leading AMCs in the country, adequate governance and control framework, sound investment administration and a well-defined investment process which has translated into competitive fund returns particularly for the largest funds under management. Rating also incorporates NIT’s robust financial profile and financial strength of its major shareholders, i.e. government and large commercial banks.
During our latest review, we have noted some attrition in NIT’s market share mainly attributable to equity market movement, which tends to have a correlation with AUM’s growth rate as majority of the same are vested in NIT’s flagship equity fund (NIUT). Growth in AUM’s was driven by retail investors, as a result of which investor granularity and retail mix posted improvement. In FY21, the management has made foray in establishing SMA operations, onboarding a single client with AUMs of ~Rs. 60b.
Fund performance review of NIT has an overarching weightage on NIUT’s fund performance, as it comprises a significant proportion of NIT’s AUMs. In FY21, NIUT’s fund performance remained in line with benchmark. Over the 5 and 10 year horizon, NIUT’s returns compare favourably to benchmark i.e. KSE-100 return index. Performance of remaining funds posted mixed trends in peer rankings. During the period under review, NIT launched an Islamic Money Market Fund. Cognizant of the AUM concentration in NIUT, new product offerings are on the anvil.
Rating incorporates NIT’s extensive outreach with a network of 27 branches spread nationwide including an investors’ facilitation center. The management has also added sales teams in Karachi and Lahore, during the period under review. NIT has its web portal and mobile application (both android and ios) in place for smooth account opening and investment and redemption processing. Further, a dedicated product manager has been appointed to pursue digitization initiatives going forward. The assigned rating remains dependent on maintaining market positioning and fund returns in line with peers.
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/