national investment trust (nit)

“Contents Of The Presentation”

• Investment Trust

• Mutual Funds

• History of NIT

• Introduction of NIT

• Objectives

• NIT Returns

• NIT Mission and Vision

• Edge on Competitors


Investment Trusts

• Investment Trusts are essentially companies (not technically trusts) which have been set up to invest in the shares of other companies.


Investment Trusts

• Their value therefore represents the assets in which they are invested rather than the company's own property, personnel or ideas


Investment Trusts

• . They are designed to give individual investors the opportunity to invest in wider range of companies, and at a lower cost, than they would be able to achieve on their own.


Investment Trusts

• Investment Trust work as vehicle

• Board of directors

• Fund manager (professional to invest)


Investment Trusts Types

• Split Capital Investment Trust

• Real Estate Investment Trusts (REITs)


Investment Trusts History

• The Foreign & Colonial Investment Trust,

• Created in 1868 by the founder of the Royal Brompton Hospital Philip Rose.

• It initially invested in Government Bonds

• Started investing in equities (company shares) in 1925,


Mutual Funds

Mutual Funds are a pool of money invested by small, medium & large Investors .

Simply put, a mutual fund is a type of investment. You can think of it as a group of people with similar goals who, instead of investing on their own, pool their money.


Mutual Funds

• They hire a professional manager to invest that money in securities, such as stocks, bonds, and money market instruments.


Types of Mutual Funds

• Open Ended Funds

• Close Ended Funds


Open Ended Funds

A type of mutual fund, where there are no restrictions on the amount of shares the fund will issue.

If demand is high enough, the fund will continue to issue shares no matter how many investors there are.

Open-end funds also buy back shares when investors wish to sell.


Close Ended Funds

Closed End Funds have a predetermined and fixed number of shares outstanding.

Closed-end funds behave more like stocks because they trade on an exchange Market

Price is determined by market demand after an initial public offering (IPO) process.


History of NIT

• The mutual fund industry was introduced in Pakistan by the Government in the form of National Investment Trust (NIT) it was constituted under the trust deed dated 12th November 1962.

• Executed between the National Investment Trust Ltd (NITL) as the Management Company and the National Bank of Pakistan as the Trustee.

History of NIT

• Mutual Funds in Pakistan are running under the Non-Banking Finance Companies (NBFC) Act 2003 and regulated by Securities and Exchange Commission of Pakistan (SECP).

Introduction

• The principal activity of the company is to manage an open end mutual fund

• The fund is the largest open-end mutual fund in Pakistan, with investments in approximately 600 of the 706 listed Pakistani Companies.

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Introduction

• NIT's portfolio has over 90 percent correlation with the Karachi Stock Exchange

• NIT is valued at approximately Rs. 81 billion.

• The fund has a 93% weighting in equities and 7% weighting in fixed income securities

Objectives

• NIT's objective is to provide its Unit-holders with a balance between their regular income needs and long-term capital appreciation.

• The core objective of NIT is to maximize returns for Unit holders, provide a regular stream of current income through dividends,

Objectives Of NIT

• NIT has approximately 62,000 unit holders and over 23 branches and 2 booths across Pakistan.

NIT strategic holdings

• The fund has also significant strategic holdings in some of Pakistan's best-managed companies.

• e.g. Pakistan State Oil, Sui Northern, Sui Southern, Karachi Electric Supply Corporation, Pakistan Tele Communication Limited etc. These companies comprise the backbone of Pakistan's economy

NIT Restructuring program

• In 1998, NITL embarked on a major restructuring program, which included induction of senior professional management and modern asset management techniques..


• The other major step taken by the company includes its proactive role in corporate governance.

• Each investment decision is made within guidelines provided by NITL's investment committee.


• The objective of the team - management approach is to safeguard the fund from over reliance on any individual and to ensure transparency and rigorous evaluation of investment decisions

NIT Returns/Profits

• Nit mainly invests in listed equities

• The return from investment in stock market comprise of two components

• 1) capital gain/loss resulting from appreciation/drop in stock price and

• 2) dividend paid by companies to their shareholders.

NIT Mission

• We are active and resourceful in developing proactive investment strategies for our shareholders

• We are committed to understanding our shareholders' needs to generate the potential for the most profitable returns

• We are confident in our abilities, proud of what we do.

Mission statement Components

• Customer:

• Philosophy:

• Concern for employees

• Self concept:

• Concern for survival, growth, and profitability:

• Technology:

Vision Statement

• We are collaborative, working together as an efficient, dynamic team. Individually, each member is a skilled practitioner.

• As a result, we stand apart from the rest in the real estate investment field

About NIT Unit

• Units are issued in the form of physical Unit certificates

• NIT Units are issued in the name of the investor against the Investment.

• Unit holders

• NIT Units can be purchased/redeemed from

1.NIT Branches

2.Authorized Banks

Edge on competitors

• Corporate Governance

• Management

• Trustee

Corporate Governance

• The effective governance is done by Board of Directors

• Monitored by the nominees

• Which create a conducive environment for improved governance in the investor companies.

Corporate Governance

• Directors needs continuous reinforcement of training and enhanced awareness levels

• NIT organized a number of workshops/seminars to debate and discuss issues regarding investor companies and changing environment.

Management

• The Board of Directors of NITL representing shareholders are mainly from

1.Leading Financial Institutions

2.Govt. representatives

The company has been assigned an asset manager rating of "AM2-" by Pakistan Credit Rating Agency (PACRA).

Trustee - National Bank of Pakistan

• National Bank of Pakistan, Pakistan's premier bank determined to set higher standards of achievements.

• It is the major business partner for the Government of Pakistan with a special effect on Pakistan's economic growth.

Why invest through NIT?

• Professional Management

• Diversification

• Convenience

Thanks For Your Time

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