PACRA Maintains Stability Rating of NBP Money Market Fund
NBP Money Market Fund (or the "Fund") is a very low-risk profile Fund. The objective of the Fund is to provide stable stream of income by investing in AA and above-rated banks and money market instruments. The assigned rating reflects the Fund's strong credit and interest rate risk profile emanating from its low-risk investment strategy. As of Jun'23, the Fund had allocated ~59.7% in T-Bills, ~30.4% of cash in mainly AA+ and above-rated banks in the form of deposits and placements, and ~9.9% in AAA-rated DFIs. The duration and the WAM of the Fund stood at 32 days at the end of Jun’23, limiting the exposure to interest rate and credit risk. The WAM of the Fund cannot exceed 90 days, thereby providing liquidity along with high-quality credit profile. As of Jun'23, the unit holding pattern of the Fund stood at ~51.67% representing top ten investor concentration; limiting the exposure to redemption pressure. However, the ability to meet redemption remained sound on the back of strong liquid profile. During FY23, the Fund remained compliant with the credit quality criteria barring a minor deviation in a month. The Fund's performance during FY23 beat the benchmark and gave an annualized return of 17.7%.
Going forward, any material changes in the investment policy or the devised rating criteria for the assigned rating would have an impact on the ratings. Risk may vary slightly from time to time considering the volatility of economic conditions.
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 ~238bln at end-Jun'23, the Company is currently managing a diversified fund slate of twenty five open-end mutual funds, two voluntary pension schemes and one Exchange Traded Fund.