Karachi: The NBP Financial Sector Income Fund, managed by NBP Fund Management Limited, has reported a significant decrease in its fund size by 8%, declining from Rs. 75.07 billion to Rs. 68.86 billion, for the quarter ending September 30, 2025. This revelation comes amidst a challenging economic environment characterized by fluctuating inflation rates and macroeconomic adjustments.
The interim financial statements, which were presented by the Board of Directors of NBP Fund Management Limited, highlighted several key aspects of the fund’s performance over the quarter. The unit price of the Fund experienced a moderate increase, climbing from Rs. 10.6788 on June 30, 2025, to Rs. 10.9457 by the end of September, translating to an annualized return of 9.9%. This performance, however, falls short of the benchmark return of 10.6% for the same period.
According to information available from the Pakistan Stock Exchange (PSX), the Fund’s income generation during the quarter was robust, with a reported total income of Rs. 2.24 billion. After accounting for expenses totaling Rs. 266.26 million, the net income stood at Rs. 1.97 billion. The Fund maintained its investment strategy by allocating a minimum of 70% of its assets to financial sector debt securities, ensuring that these instruments held a minimum rating of AA-. This approach is crafted to manage credit risk while enhancing liquidity.
The broader economic context during this period was shaped by the State Bank of Pakistan’s decision to keep the policy rate steady at 11% in an effort to control inflation, which saw a big move rising from 3.0% in August to 5.6% in September. Despite the volatility, the average inflation for the first quarter eased to 4.2%, significantly lower compared to 9.2% during the same period last year.
The Fund’s financial statements also underscore the macroeconomic pressures influencing the fiscal landscape. The real GDP growth for fiscal year 2026 is projected between 3.0% and 3.5%, which is below the government’s target, due to the compounded effects of flood-related agricultural losses and inflationary pressures. However, the fiscal performance showed signs of improvement, with expectations of a primary surplus in the first quarter, supported by significant profit transfers from the State Bank of Pakistan and elevated petroleum levies.
The NBP Financial Sector Income Fund continues to operate under a stable framework, with the Pakistan Credit Rating Agency (PACRA) assigning it a fund stability rating of ‘A+ (f)’. The Fund’s strategic asset allocation and liquidity management, in conjunction with supportive monetary and fiscal policies, aim to sustain its resilience against economic fluctuations.