PACRA Maintains Stability Rating of NBP Islamic Daily Dividend Fund
|Rating Type||Stability Rating|
NBP Islamic Daily Dividend Fund (or the "Fund") is a low-risk profile fund. The Fund aims to earn competitive return along with daily dividend by investing in Shariah
Compliant money market instruments. The assigned rating reflects strong capacity to uphold the stability of returns and respond to stress situations. As of end-Dec’21, the Fund had invested ~81% of its net assets in ‘AA’ and higher-rated bank. The Fund had placed 13% of AUMs in ICPs rated 'AA'. The WAM and duration of the Fund were recorded at 32 days. The low WAM shields the fund from credit risk; whereas, the lower duration limits the Fund's exposure to interest rate risk. The Fund is subject to high redemption pressure due to high top 10 investor concentration, which stood at 70% at end-Dec’21. However, the highly liquid nature of the Fund provides cushion against the redemption pressure.
Going forward, the fund intends to maintain its current asset allocation. Material changes in the fund's asset allocation strategy, impacting its credit quality and/or exposure to interest rate risk will impact the rating.
NBP Fund Management Limited (or the "Company"), established in 2005, is licensed by Securities and Exchange Commission (SECP) to carry out asset management and investment advisory business. National Bank of Pakistan is the largest shareholder of the company with a stake of ~54%. In 2019, Baltoro Growth Fund has acquired the entire 36% stake of Alexandra Fund Management Private Limited in the Company. Baltoro Capital is a Pakistan focused private equity firm. Baltoro Capital has made investments in the pharmaceutical, renewable energy and financial services sectors in Pakistan. It is actively deploying its funds in businesses positioned to achieve extraordinary growth. The CEO of NBP Fund Management Limited, Dr. Amjad Waheed, CFA and family also holds a 10% stake in the company.
The Company’s nine-member Board of Directors includes three independent directors and the CEO. With overall assets under management of PKR 169,025mln at end-Dec'21, the Company is currently managing a diversified fund slate of twenty seven open-end mutual funds, two voluntary pension schemes and an Exchange Traded Fund.