National Investment Trust (NIT) takes pride in being the first and the largest asset management company of Pakistan with the highest number of unit holders of any mutual fund in the country and with net assets constituting about one third of the entire mutual fund industry.
As of 30th April 2011, net assets of NIT stood at around Rs 79 billion spread across six funds. NIT has had a track record of consistently paying dividends to its unitholders without any break over the entire 49 years life of the Trust. The financial results for the nine months ended 30th March 2011 speaks a lot about its ability to maintain the past streak of performance on the back of its highly dedicated and professional management team, which forms an integral part of NIT, operating relentlessly under the able guidance of Mr Wazir Ali Khoja, Chairman and Managing Director.
NIT will shortly be celebrating completion of 50 years of its enviable track record. During this long journey, NIT has come a long way and has achieved various milestones including consistently paying dividends in billion of rupees since its inception in 1962, achieving the landmark fund under management size of Rs 100 billion in 2008, achieving the highest number of unitholders and introducting new products to cater the needs of investors with varying risk profile besides pre-emptively undertaking manifold structural and infrastructural reforms to achieve unparallel operational efficiencies.
During the year, rating of NITL has also been improved by one notch to"AM2" by Pakistan Credit Rating Agency (PACRA), which denotes a very strong capacity to manage risks inherent in asset management and the asset manager meets very high investment management industry standards and benchmarks.
NIT commenced its operations in 1962 with the launch of an equity Fund, NI(U)T-the ever first mutual fund in the country. NIT has been successfully managing its flagship product of NI(U)T Fund which has grown to be the single largest mutual fund of the country . Keeping in view the long demand by investors and in order to cater to varied needs of investors, NITL for the very first time ventured into the fixed income category by launching two Funds in FY10. NIT Government Bond Fund, a very low risk product was launched in November 2009 followed by NIT Income Fund which was introduced in February 2010 designed for low to medium risk investors.
NIT, being the premier and the largest participant in the stock market, has always acted with the highest standard of professional ethics and great amount of responsibility. The Government and other stakeholders always reposed confidence in NIT and assigned it important roles on many occasions, be it to generate liquidity or to provide support to the capital markets in time of crisis. NIT had an initial mandate to take up a specific percentage of every initial public offering (IPO) under the preferential quota regime. This helped accelerate the pace of industrialisation in the country and also provided capital markets the much needed liquidity because of the long-term investment perspective. Furthermore, at the time of unprecedented crisis in the stock market, NIT launched NIT-Equity market Opportunity (NIT-EMOF) Fund in July 2008 to support the stock market. At the time of removal of the floor on the stock market which remained in place for 110 days due to un-proportioned nature of the crisis, the Government and other stakeholders, foreseeing a massive selling pressure from local and foreign investors, once again asked NIT to launch a fund to support the stock market. NIT launched its NIT-State Enterprise Fund to help support the market. It is evident from the record that NIT succeeded in bringing stability in the stock market by restoring the confidence level of investors.
NIT has a history of generating consistent returns for its valuable investors and in fact, has not missed a dividend payment even once in its entire history of operation. This became possible due to selection of companies enjoying growth potential and regular stream of dividend inflow. For the nine month period ending March 2011, NI(U)T registered a phenomenal growth of 74% in net profit (excluding unrealized figures), which increased to Rs 3,343 million (earning per unit of Rs 2.85) from Rs 1,922 million in 9MFY10 (earning per unit of Rs 1.84). Furthermore, in addition to the realisation of capital gains of Rs 548 million during the period under review, the Fund also earned a dividend income of Rs 1,571 million, up 23%, as compared to Rs 1,280 million in the corresponding period last year. Hence, the NI(U)T Fund is on track to deliver a steller performance once again for the full year 2011 as well.
In the developed countries, people generally invest their savings through mutual funds instead of placing them in banks where the return is usually lower. Owing to this phenomenon, net assets of the mutual fund industry are usually far bigger than bank deposits as their investor base is more sophisticated and much more aware of the benefits of investing through the mutual funds. In fact, even in the developing countries, the net assets of the mutual fund industry range from about 10% to 25% of the total bank deposit base, unlike Pakistan, where net assets of the mutual fund industry even today, constitute merely around 6% of the total bank deposit base. Hence, there is a huge potential for growth of the mutual fund industry of Pakistan. NIT is fully cognisant of the market potential and our Managing Director Mr Wazir Ali Khoja firmly believes that only expanding the retail base of investors can provide sustainable growth to the mutual fund industry of Pakistan. Mr Khoja strongly feels that opening of new branches and increasing the retail base would inculcate a saving culture amongst the people in Pakistan where the saving rate is very low and also increase awareness about the mutual funds which in turn will increase the net asset base of NIT as well.
In the same pursuit and vision in mind, our Managing director Mr Wazir Ali Khoja has embarked on his plan to expand the branch network of NIT. With the opening of one more branch in Karachi at Nazimabad, the total number of branches of NIT has increased to 21 across the country. Two more branches, one each in Karachi and Lahore are expected to go operational very shortly. NIT's distribution network thus will comprise of 23 branches, various Authorised bank branches all over Pakistan and Arab Emirates Investment Bank (AEIB) in Dubai (UAE). One of the factors which gives NIT an edge over its competitors is its 'outreach' or ability to reach the retail investors. One such latest initiative is organising supermarket kiosks at various places and in major cities. The underlying objective remains the same as increasing awareness and mobilising savings for NIT.
In a bid to provide investors with an efficient services, NIT has recently launched an ATM based redemption facility for its investors.
Mr Wazil Ali Khoja also believes that development of an efficient secondary market for the fixed income securities is of paramount importance as this would ensure price discovery and liquidity for the fixed income securities thereby giving required impetus to the growth of fixed income funds. The serious and appropriate measures being taken by the Mutual Funds Association of Pakistan (MUFAP) and the SECP in this regard are highly commendable.
Our Managing Director is highly appreciative of the contribution and guidance of the Board of Directors of NITL towards the development and outstanding performance of NIT. Further, the supporting role of the Ministry of Finance, the regulatory authorities, especially, the current professional management of the SECP is also highly respected.
Succinctly, the greatest asset which this great institution has earned over years is the unshakeable confidence of investors which is represented through its ever growing investor base that at present stands at around 59,000 investors from across the country. Today, when an individual thinks of a mutual fund especially stock market investments, he instantly thinks of NIT.