Karachi, December 30, 2016: JCR-VIS Credit Rating Co. Ltd. (JCR-VIS) has reaffirmed the Management Quality (MQ) Rating of UBL Fund Managers Limited (UBL FM) at ‘AM2++’ (AM-Two Plus Plus). Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on May 04, 2016.
Market share of UBL Fund Managers Limited (UBL AMC) in total industry Assets under Management (AUMs) increased to 10.8% (FY15: 9.6%) as at end-FY16. Conventional funds represented 57% of total AUMs with remaining AUMs being generated through Islamic Funds, which showcased a higher growth than conventional funds. Sizeable increase in number of new investors has resulted in improved proportion of retail AUMs to around half of total AUMs; however concentration in retail AUMs is sizeable and needs to be reduced, going forward.
Senior management team has witnessed a number of changes in the ongoing year; new inductions include the Chief Executive Officer (CEO), Head of Internal Audit, Chief Risk Officer (CRO) and Chief Financial Officer (CFO). While fresh inductions include qualified professionals with relevant industry experience, stability and cohesion in the senior management team is considered important. As at end-October’2016, UBL AMC had 9 conventional and 14 Islamic Funds under management. Product suite of the company caters to most investor needs with UBL FM being a leader in new product development.Going forward, active allocation plans and capital protected funds are projected to be the growth drivers in terms of AUMs growth for 2017.
Overall corporate governance framework is supported by adequate board composition and oversight and structured strategic planning process. Overall focus on control environment has been further enhanced through induction of qualified personnel, special audits for areas with room for improvement and enhancing the scope of risk management function.
The peer ranking of equity funds have improved during FY16 (July’15 to June’16) and performance of retirement fund compare favorably to peers. Returns of largest conventional income fund features in the top quartile during FY15 and FY16. As one of the key rating parameters, JCR-VIS will continue to monitor the performance of assets under management across different asset classes over time; weakness in the same could trigger a rating review.
For further information on this rating announcement, please contact the undersigned (Ext: 516) or Mr. Javed Callea (Ext: 501) at 35311861-70or fax to 35311872.
Jamal Abbas Zaidi
Applicable Rating Criteria: Mutual Funds Rating (March 2016)
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