Pakistan: NAFA Income Opportunity Fund (NIOF) - December 2017

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1. NAFA Income Opportunity Fund (NIOF) MONTHLY REPORT (MUFAP's Recommended Format) Unit Price (30/12/2017): Rs. 10.9609 December 2017 Performance % FYTD 2018 Rolling 12 months FY 2017 FY 2016 Last 3 years* Last 5 years* Last 10 Since Launch years* April 21, 2006 * NAFA Income Opportunity Fund 4.8% 4.9% 5.4% 6.3% 7.5% 13.2% 16.6% 10.3% 7.5% 10.6% 7.7% 8.1% 6.2% 6.2% 6.2% 6.1% 6.5% 9.0% 9.8% 9.9% 6.6% 7.9% 10.2% 10.2% Performance Period Benchmark Dec 2017 * Annualized Return Based on Morning Star Methodology All other returns are Annualized Simple Return FY 2015 FY 2014 FY 2013 The performance reported is net of management fee & all other expenses and based on dividend reinvestment gross of with-holding tax where applicable. General Information Investment Objective Launch Date: Fund Size: Type: Dealing Days: Dealing Time: To seek maximum possible preservation of capital and a reasonable rate of return via investing primarily in money market & debt securities having good credit rating and liquidity. Settlement: Pricing Mechanism: Load:** Management Fee: Total Expense Ratio: Risk Profile: Fund Stability Rating: Listing: Custodian & Trustee: Auditors: Benchmark: Fund Manager: Minimum Subscription: Asset Manager Rating: April 21, 2006 Rs. 8,256 million Open-end – Income Fund Daily – Monday to Saturday (Mon - Thr) 9:00 A.M to 5:00 P.M (Friday) 9:00 A.M to 5:30 P.M (Saturday) 9:00 A.M to 1:00 P.M 2-3 business days Forward Pricing Front End Load (Individual): 1% (Nil on investment above Rs. 26 million) Front End Load (Other): 1% (Nil on investment above Rs. 16 million) Back End Load: NIL 1.00% per annum (Effective from May 2, 2017) 1.65% p.a.(including 0.33% government levies) Low "A(f)" by PACRA Pakistan Stock Exchange Central Depository Company (CDC) Deloitte Yousuf Adil Chartered Accountants 6-Month KIBOR Muhammad Ali Bhabha, CFA, FRM Growth Unit: Rs. 10,000/Income Unit: Rs. 100,000/AM1 by PACRA (Very High Quality) Fund Manager Commentary The Fund posted an annualized return of 4.8% in December 2017 as compared to the Benchmark return of 6.2%. The reported return is net of management fee and all other expenses. The weighted average time to maturity of the Fund is around 0.9 year. The Fund's sector allocation is fairly diversified with exposure to Fertilizer, Banking and Financial Services sectors. TFC portfolio of the Fund is predominantly floating rate linked to KIBOR. However, since TFCs prices may go up or down, therefore, only investors with medium-term investment horizon are advised to invest in this Fund. We will rebalance the allocation of the Fund proactively based on the capital market outlook. Details of Non-Compliant Investments ** effective from January 02, 2017 Particulars Asset Allocation (% of Total Assets) 30-Dec-17 TFCs / Sukuks T-Bills PIBs Placements with Banks Placements with DFIs RFS MTS Equity Bank Deposits Others including receivables Total Leverage 19.0% 2.4% 14.7% 9.6% 0.1% 1.6% 0.2% 51.5% 0.9% 100.0% Nil 30-Nov-17 17.7% 2.3% 1.3% 26.6% 0.7% 0.3% 49.6% 1.5% 100.0% Nil Top TFC/Sukuk Holdings (as at December 30, 2017) % of Total Assets Name of TFCs / Sukuks 5.8% Dawood Hercules Corp Ltd 16-NOV-17 16-NOV-22 3.6% JS Bank Limited 14-DEC-16 14-DEC-23 2.4% HBL TFC 19-FEB-16 19-FEB-26 2.0% BANK ALFALAH LTD - V - REVISED 20-FEB-13 20-FEB-21 1.4% Jahangir Siddiqui and Company Ltd. 18-Jul-17 18-Jul-22 1.2% JS Bank Limited 26-DEC-17 26-DEC-24 1.1% Silk Bank Limited 10-AUG-17 10-AUG-25 1.1% Jahangir Siddiqui and Company Ltd. 24-Jun-16 24-Jun-21 0.4% Jahangir Siddiqui and Company Ltd. 08-APR-14 08-APR-19 19.0% Total Sindh Workers' Welfare Fund (SWWF) The scheme has maintained provisions against Sindh Workers' Welfare Fund's liability to the tune of Rs. 15,131,501/-. If the same were not made the NAV per unit/last one year return of scheme would be higher by Rs. 0.0201/0.19%. For details investors are advised to read note 9 of the financial statements of the Scheme for the period ended September 30, 2017. Name of the Members of Investment Committee Value of Type of Investments Investment before Provision AgriTech Limited I - Revised II 29-NOV-07 29-NOV-19 AgriTech Limited V 01-JUL-11 01-JAN-18 Azgard Nine Limited III (PP) - Revised 04-DEC-07 04-DEC-18 Azgard Nine Limited V (PPTFC Markup) 31-MAR-12 31-MAR-19 BRR Guardian Modaraba - Sukuk Revised II 07-JUL-08 07-APR-19 Dewan Cement Limited (Pre-IPO) 17-JAN-08 17-JAN-18 Eden House Limited - Sukuk Revised 29-MAR-08 29-SEP-19 New Allied Electronics Limited (PP) 15-MAY-07 15-NOV-18 New Allied Electronics Limited II - Sukuk 03-DEC-07 03-DEC-18 PACE Pakistan Limited - Revised 15-FEB-08 15-FEB-19 Saudi Pak Leasing Company Limited - Revised II 13-MAR-08 13-MAR-19 Worldcall Telecom Limited - Revised 07-OCT-08 07-OCT-21 Azgard Nine Limited (Non-Voting Ordinary Shares) Agritech Limited Shares Total TFC TFC TFC TFC Sukuk TFC Sukuk TFC Sukuk TFC TFC TFC Equity Equity Provision held 149,860,200 149,860,200 32,320,000 32,320,000 108,376,850 108,376,850 82,180,000 82,180,000 10,296,248 10,296,248 150,000,000 150,000,000 9,056,250 9,056,250 31,706,536 31,706,536 44,148,934 44,148,934 149,820,000 149,820,000 41,321,115 41,321,115 88,455,825 88,455,825 12,854 12,854 141,403,150 121,727,912 1,038,957,962 1,019,282,724 Value of Investments after Provision % of Net Assets % of Gross Assets 19,675,238 19,675,238 0.2% 0.2% 0.2% 0.2% Credit Quality of the Portfolio as of December 30, 2017 (% of Total Assets) T-Bills (AAA rated) AAA AA+ AA AAA+ A ARFS (Un-rated) MTS (Un-rated) Equity (Un-rated) Others including receivables Total 2.4% 0.7% 15.8% 8.1% 28.7% 20.2% 6.1% 15.2% 0.1% 1.6% 0.2% 0.9% 100.0% Dr. Amjad Waheed, CFA Sajjad Anwar, CFA Muhammad Ali Bhabha, CFA, FRM Hassan Raza, CFA Notes: 1) The calculation of performance does not include cost of front end load. 2) Taxes apply. Further, tax credit also available as per section 62 of the Income Tax Ordinance, 2001. Disclaimer: This publication is for informational purposes only and nothing herein should be construed as a solicitation, recommendation or an offer to buy or sell any fund. All investments in mutual funds are subject to market risks. Past performance is not necessarily indicative of future results. Please read the Offering Document to understand investment policies and the risks involved. The scheme holds certain non-compliant investments. Before making any investment decision, investors should review the latest monthly Fund Manager Report and Financial Statements. The reported returns may include provisioning and reversal of provisioning against some debt securities.