PACRA Maintains Stability Rating of NIT Islamic Income Fund

The NIT Islamic Income Fund ("the Fund") is characterized as a medium-risk Shariah-compliant fixed income collective investment scheme, engineered to generate stable returns while preserving capital through a diversified portfolio of Islamic instruments. The Fund’s balanced approach, which combines liquidity management with yield enhancement opportunities, positions it as a solution for investors seeking Shariah-compliant income with measured risk exposure. As of June 30, 2025, the Fund reported Assets Under Management (AUM) of PKR 2.25 billion, reflecting its established presence in Pakistan's Islamic finance sector. The Fund maintains a strategic allocation with a pronounced liquidity emphasis: 47% is held in cash, 29% in corporate Sukuks, 11% in Government of Pakistan (GoP) Ijara Sukuks, and 11% in bank placements and DFIs, demonstrating a comprehensive approach to Islamic income generation. The Fund exhibits a diversified credit profile, with 48% in A+, 17% of assets held in 'AAA' rated avenues, 12% allocated to 'AA+' rated instruments, and a further 16.07% distributed across 'A1+' and 'A1' rated securities. This tiered structure reflects active management of the risk-return spectrum within Shariah parameters, while the substantial 47% cash position provides fundamental liquidity support and mitigates credit risk concentration. The Fund’s risk profile is conservative, anchored by a Weighted Average Maturity (WAM) of 101 days. This abbreviated maturity structure indicates minimal interest rate sensitivity, ensures quick asset turnover capability, and reflects a disciplined balance between yield capture and liquidity preservation. The 47% cash allocation, complemented by 11% in bank placements, ensures immediate liquidity availability, while the 101-day WAM allows for measured yield enhancement from the Fund's Sukuk holdings. A key analytical consideration is the Fund’s investor concentration, with the top 10 investors representing 46% of AUM. This creates a moderate vulnerability to redemption pressure; however, this risk is substantially mitigated by the Fund’s strong structural defenses, including the 47% cash buffer, the 11% sovereign Sukuk allocation, and daily dealing provisions. These features collectively provide ample capacity to manage potential redemption pressures without compromising portfolio stability or Shariah compliance.
Going forward, any material changes in the investment policy or the devised rating criteria for the assigned rating would have an impact on the rating.

About the Entity
Established in 1962, National Investment Trust Limited (NITL) stands as a pioneering institution in Pakistan’s mutual fund industry. Governed by a Board of Directors comprising fifteen distinguished members, the company exemplifies leadership, stability, and strategic governance. On February 14, 2025, Mr. Manzoor Ahmed assumed the role of Acting Managing Director of NITL. With an illustrious career spanning over 33 years in the mutual fund sector, Mr. Ahmed brings unparalleled expertise in investment management, capital market operations, product development, research, and regulatory affairs. In his capacity as Chief Operating Officer (COO), he has demonstrated exceptional leadership in overseeing the company’s operations and investment portfolio, which exceeds PKR 213 billion in value. As one of Pakistan’s foremost asset management companies, NITL boasts a diversified portfolio comprising sixteen open-end funds, including two non-public funds (NIT-SEF and NIT-EMOF), two voluntary pension schemes, two employer pension schemes, and an exchange-traded fund (ETF). As of June 2025, the company’s assets under management (AUM) stood at an impressive ~PKR 195 billion, reinforcing its position as a market leader in wealth and fund management. NITL remains committed to delivering superior returns, maintaining strong governance frameworks, and fostering innovation in Pakistan’s financial sector, ensuring sustained value for its stakeholders.