⚡ Flash Summary

NBP Islamic Daily Dividend Fund (NIDDF) reported its financial results for the quarter ended September 30, 2025. The fund’s size decreased significantly by 66% from Rs. 15,227 million to Rs. 5,243 million. Despite the decrease in size, the unit price increased from Rs. 9.7525 (Ex-Div) on June 30, 2025, to Rs. 10.000 on September 30, 2025, reflecting a return of 10.1% p.a., outperforming the benchmark return of 9.7% p.a. The fund earned a total income of Rs. 200.19 million and net income of Rs. 181.01 million after expenses.

📌 Key Takeaways

• 💰 Fund size decreased significantly by 66%, from Rs. 15,227 million to Rs. 5,243 million.
• 📈 Unit price increased from Rs. 9.7525 (Ex-Div) to Rs. 10.000, yielding a 10.1% p.a. return.
• ✅ The fund outperformed its benchmark, which had a return of 9.7% p.a.
• 💸 Total income earned during the quarter was Rs. 200.19 million.
• 🧾 Net income after deducting expenses was Rs. 181.01 million.
• 📊 Headline inflation rose to 5.6% in September from 3.0% in August, with the average Q1 inflation easing to 4.2%.
• 🎯 Average inflation for FY26 is projected to remain within the SBP’s 5%-7% target range.
• 🌱 Real GDP growth for FY26 is projected between 3.0% and 3.5%.
• ⚖️ Foreign exchange reserves stood at USD 14.4 billion on September 26th.
• ✅ The fund is categorized as a Shariah Compliant Money Market Fund with a rating of ‘AA+ (f)’ by PACRA.
• 🏦 The fund aims to provide better returns than Islamic banks and windows of commercial banks.
• 📅 Fund cannot invest in securities exceeding six months maturity.
• 🕒 Weighted average time to maturity cannot exceed 90 days.
• 📊 Asset allocation includes Bai Muajjal (34.09%), Corporate Sukuk Certificate (17.59%), and Government securities (28.88%).
• ✔️ Interim cash dividend of 2.51% of the opening ex-NAV approved for the quarter ended September 30, 2025.

🎯 Investment Thesis

The fund’s performance is a mixed bag. The decrease in fund size is a concern, but the outperformance against the benchmark and positive returns are encouraging. Given the limited upside and the current market conditions, a HOLD recommendation is appropriate. Further analysis of the fund’s asset allocation and risk management practices is needed before considering a BUY recommendation.