ASSIGNMENT # 1

M. Fahad Mehmood
 Question No 1: Pick up any mutual fund in Pakistan and provide summary based on
information memorandum or prospectus etc.

1. Definition:
A Mutual Fund is a pool of money that gives investors access to a well-diversified portfolio of
stocks, bonds, and other securities. The fund's net asset value (NAV) is determined each day and
is posted on the respective Asset Management Company's website on a daily basis.

2. Regulator:
Mutual Funds Association of Pakistan (MUFAP) is the trade body for Pakistan's multi billion
rupees asset management industry. The money MUFAP members manage is in a wide variety of
investment vehicles including stocks, bonds, money market instruments, government securities
and bank deposits. MUFAP role is to ensure transparency, high ethical conduct and growth of the
mutual fund industry.

3. Mutual Fund in Pakistan:

The mutual Fund I have selected is National Investment Unit Trust (NIUT) which is Pakistans
largest and oldest Mutual Fund. As on January 31, 2017, the portfolio of NIUT Fund carries an
investment of around Rs. 89.496 Billion invested in over 388 listed companies. The Fund belongs
to around 47,749 unit holders. NI(U)T has been governed under the Trust Deed dated 12th
November 1962, executed between National Investment Trust Ltd (NITL) as Management
Company and National Bank of Pakistan as Trustee.

Recently, Central Depository Company of Pakistan Limited (CDCPL) has been appointed as the
new Trustee of NIUT Fund with the approval of Regulatory Authority.

4. National Investment Unit Trust:

4.1 Constitution of the Scheme:
National Investment Trust Limited, a Non-Banking Finance Company incorporated under the
Companies Ordinance 1984 and licensed by SECP to undertake asset management services,

4.2 Duration
The duration of the Fund is perpetual. However, SECP or the Management Company may wind it
up or revocate on the occurrence of certain events as specified in the Regulations or the Trust
Deed.

4.3 Transaction in Units

The Offer (Purchase) and Redemption (Repurchase) will be made by the Management Company
at Offer and Redemption prices declared for every Dealing Day on the basis of the Net Asset Value
(NAV). The NAV based price shall be fixed after adjusting for the Sales Load as the case may be
and any Transaction Costs that may be applicable.

4.4 Investment Policy

NIUT Fund will primarily invest in equity related instruments. In case the Management Company
expects the stock market to drop, based on the analysis of macroeconomic factors such as interest
rates, economic growth rate, political climate, corporate earnings, stock market evaluations, etc.,
the Management Company may temporarily allocate assets to other Authorized Investments,
subject to prescribed regulatory limits. The Fund will decide level of exposure in equities on the
basis of macro-economic outlook and market attractiveness.
To generate benchmark returns, NIUT Fund would use both qualitative and quantitative equity
selection processes. The asset allocation decision would give proper weights to both fundamental
and technical analysis.

NIUT Fund shall be authorized to invest in the following investment instruments and in the manner
mentioned below in Authorized Investments. :
Authorized Investment Min Exposure Limit Max Exposure Limit
Investments Instrument
No.
1 Listed equity 70%* 100%
securities. during the year based on during the year based on
quarterly average investment quarterly average investment
calculated on a daily basis calculated on a daily basis
2 Treasury bills not 0% 30%
exceeding 90 days during the year based on during the year based on
maturity and cash or quarterly average investment quarterly average investment
near term cash calculated on a daily basis calculated on a daily basis
instruments
including cash in
Bank accounts
(excluding TDRs).
The rating of banks
shall be BBB+ or
above
3 Equity security not 0% 15%
listed on the Stock
Exchange, where
application for
listing has been
accepted by the
Stock Exchange.

4.5 Risk Disclosure

NIUT discloses that its investors must realize that all investments in mutual Funds and securities
are subject to market risks. Its target return / dividend range cannot be guaranteed and it makes its
investors clearly understood that the portfolio of the Fund is subject to market price fluctuations
and other risks inherent in all such investments. The risks emanate from various factors that
include, but are not limited to:
 a) Equity Risk
b) Government Regulation Risk
c) Credit Risk
d) Default Risk
e) Credit Spread Risk
f) Price Risk
g) Liquidity Risk
h) Settlement Risk
i) Reinvestment Rate Risk
j) Events Risk
k) Redemption Risk

4.5 Principal Shareholders Information:

Sr. No. Names % of Holding Number of Shares Amount (Rs)
01 Government of Pakistan 7.67 72,864 7,286,400
02 Industrial Development Bank 16.66 158,400 15,840,000
Limited
03 National Bank of Pakistan 8.33 79,200 7,920,000
04 Adamjee Foundation 8.33 79,200 7,920,000
05 MCB Bank Limited 8.33 79,200 7,920,000
06 United Bank Limited 8.33 79,200 7,920,000
07 Pakistan Reinsurance Company 8.33 79,200 7,920,000
Limited
08 Tajammal Foundation 8.33 79,200 7,920,000
09 NIB Bank Limited 8.33 79,200 7,920,000
10 Habib Bank Limited 8.33 79,200 7,920,000
11 Trustees of NIT Employees 0.66 6,336 633,600
Empowerment Trust
12 Mr. Muhammad Hussain Dawood 2.52 23,925 2,392,500
13 Mr. Aziz Ahmed Dawood 1.82 17,325 1,732,500
14 Mrs. Amina Dawood 1.26 11,962 1,196,200
15 Mr. Akbar Dawood 1.22 11,550 1,155,000
16 Ms. Huma Dawood 0.61 5,775 577,500
17 Mr. Naim Hashim Dada 0.17 1,574 157,400
18 Mr. Fazal Mehmood Dada 0.17 1,574 157,400
19 Mr. Mohammad Hanif Dada 0.17 1,574 157,400
20 Mst. Mehmooda Diwan 0.08 788 78,800
21 Mst. Zetun Shaukat 0.08 788 78,800
22 Mst. Yasmeen Zakaria 0.08 788 78,800
Cochinwala
23 Mst. Parveen Younus 0.08 788 78,800
24 Mst. Adila Dada 0.08 788 78,800
 TOTAL 100% 950,400 95,040,000

4.6 Year Performance of Fund

FY 10 FY 11 FY 11 FY 13 FY 14
NI(U)T Return (%) 17.92% 24.00% 7.57% 58.42% 56.98%
KSE 100 Index Return 35.74% 28.54% 10.45% 52.20% 41.16%
(%)
Dividend Per Unit (Rs.) 2.25 4.00 3.50 3.75 4.10
Net Assets at year end 30.16 40.46 41.48 47.29 59.90
(Rs. in billion)
NAV at year End 28.17 32.14 30.27 42.41 60.69

4.7 Auditors
The auditors of NIUT are KPMG TASEER HADI & CO.

4.8 Minimum Fund Size

The minimum size of an open end scheme shall be one hundred million rupees at all times during
the life of the scheme.

4.9 Minimum Amount of Investment

The minimum amount for Investment would be of Rs. 5,000 per transaction at applicable purchase
price other than reinvestment of Dividend and Bonus Units.

4.10 Fees and Charges Payable by an Investor

The following fees and charges shall be borne by the Investor:

Front-end Load
Front end Load is a part of Sales Load which may be included in the offer price of the Units. The
remuneration of Distributors shall be paid from such Load and if the Front-end Load is insufficient
to pay the remuneration of the Distributors, the Management Company shall pay the amount
necessary to pay in full such remuneration and no charges shall be made against the Fund Property
or the Distribution Account in this respect. Such payments may be made to the Distributors by the
Management Company upon the receipt from the Trustee.

Back-end Load
Back end Load deducted from the Net Asset Value in determining the Redemption Price; provided
however that different levels of Back-end Load may be applied to different classes of Units, but
Unit Holders within a class shall be charged same level of back end load. Management Company
may change the current level of Back-end Load after giving 90 days prior notice to the Unit Holder
through newspaper (either Urdu or English Newspaper) and via post and the unit holders shall be
given an option to exit at the applicable NAV without charge of back end load as specified in the
Regulation.