NIT: the consistent fund

No fund can beat the market in the long run; NIT is no exception. But the fact that it remained consistently around the market mean, speaks for its prudent and sane choices for investment. That is the hallmark for the fund celebrating its golden anniversary.
Most market observers are aware of the fact that besides being the oldest fund in the country, it is also among the largest considering that it has more than Rs74 billion in funds under management.
The Companys renewed drive towards customer facilitation has also been well received. The addition of four new outlets, including two new branches in Karachi has not gone unnoticed among individual investors.
The recent launch of ATM cards that allow unit holders to readily redeem their units for cash has been an instant success among individual investors.
However, the achievements of this mutual fund industry pioneer extend beyond the relatively large fund size and the steady stream of dividends to investors that have established it as a consistent performer among individuals as well as institutional investors.
In the aftermath of the global financial crisis and poor risk management by stock exchanges at the time of political turmoil emanated by the assassination of Benazir Bhutto, equity prices at the local bourses collapsed like nine pins. As the liquidity crunch wiped out billions of dollars in market capitalisation, the stock indices were in a tailspin.
At this desperate juncture, it was the National Investment Trust which set up the NIT-EMOF on July 25, 2008. That was a market-support fund formed by the government, to purchase government-owned stocks, by the governments fund and it managed to take the market from doldrums to cross the 9000 mark - the level at which a floor had been introduced just months earlier.
"At that time, there was basically a crisis of confidence. The entry of NIT with a fresh fund, set up in coordination with other financial institutions did more than simply buying up stocks, it gave confidence to other investors to reconsider the attractive valuations on offer" explained a market pundit, highlighting the Funds role in restoring confidence to the shaken bourses.
Another major contribution of NIT to the local corporate sector that has fallen off the radar, is its continued effort to improve corporate governance standards in listed companies. At present, NIT is represented on the boards of directors of at least 115 listed companies.
Its investments are spread over 400 listed companies, and as such, the Company has been the forefront of promoting the constant improvement of the corporate governance standards in place at these companies.

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                        Annual Return

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Year    Dividend /   KSE100    NI(U)T

             Unit       (%)       (%)

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FY00         0.55     44.19     56.33

FY01         1.20    -10.14     -3.09

FY02         1.20     29.54     31.99

FY03         1.75     92.22    105.05

FY04         2.55     55.21     60.74

FY05         3.30     41.08     35.70

FY06         5.80     34.10     28.20

FY07         6.20     37.90     44.80

FY08         6.50    -10.80     -5.76

FY09         3.25    -41.72    -41.18

FY10         2.25     35.74     17.92

FY11         4.00     28.54     24.00

FY12         3.50     10.45      7.57

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