No matter what the industry may be going through, a player as big as National Investment Trust Limited (NITL) will continue to please its investors. Armed with a proficient fund management team, NITL aptly knows how and when to alter its portfolio mix to flaunt fine returns.
Year after year, NIUT (the equity fund) has managed to remain at the top; beating both the benchmark KSE100 index as well as its peers. As of March 2015, NIUT’s fund size stood at over Rs66 billion, more than twice the combined size of remaining equity funds in the industry.
During nine months ending March 2015, NIUT posted a decent top line growth of 17 percent year-on-year, with the growth driven mainly from hefty capital gains on sale of investments. In line with the volatile equity movements of late, the fund’s equity exposure was smartly trimmed down to 91.74 percent (March 2014: 97.1 percent), while uplifting the exposure in t-bills and cash in bank account.
Rising exposure in these avenues lent a good hand in boosting the income from bank deposits and government securities. The strategy to alter the portfolio mix also fared well in terms of returns as the fund yielded a gain of 5.73 percent (July-March 2014), thus outpacing the benchmark KSE100 index by a wide margin which gained 1.96 percent during the same period.
For NIT – Government Bond Fund (NIT–GBF), this was a heartening period as the fund boasted a handsome profitability growth of 71 percent year-on-year. With declining differential between PIBs and t-bills in recent months, excess cash was diverted to t-bills during March 2015. Resultantly, government securities now form a healthy 97 percent (Feb 2015: 73.53 percent) of the fund’s asset composition. During July-March 2015, the fund yielded a return of 15.50 percent which is a higher by a sizable 680bps than the benchmark return.
The tale of NIT – Income Fund (NIT–IF) remained similar with the fund’s bottom line burgeoning by 105 percent during 9MFY15. By rerouting excess cash to treasury bills, income from government securities stayed on the higher side. Exposure to short and long-term government bonds in the portfolio stood at 83.97 percent in March, sizably higher than 61.02 percent in the preceding month. Coupled with healthy inflows from sovereign securities, profits on bank deposits and reversal of impairment also aided the growth in top line. Further, the pace of provisioning against TFCs has slowed down, thus comforting fund’s profitability. In terms of returns, the fund continues to stay ahead of the benchmark, boasting a gain of 10.56 percent (July-March 2015).
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NITL - Earnings per unit (Rs)
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9MFY15 9MFY14 chg
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National Investment Unit Trust (NI 4.61 3.94 17%
NIT Government Bond Fund 0.9061 0.5313 71%
NIT Income Fund 0.9969 0.4868 105%
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Source: KSE announcement
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