Press Release

JCR-VIS Reaffirms Fund Stability Rating of UBL Income Opportunity Fund

Karachi, December 30, 2016: JCR-VIS Credit Rating Company Limited has reaffirmed the Fund Stability Rating (FSR) of UBL Income Opportunity Fund (UIOF) (formerly UBL Financial Sector Bond Fund (UFBF)) at ‘A-(f)’ (Single A Minus (f). The previous rating action was announced on April 07, 2016.

UBL Financial Sector Bond Fund managed by UBL Fund Managers, was changed to UBL Income Opportunity Fund (UIOF) in April’2016 with the consent of Securities and Exchange Commission of Pakistan. Investment guidelines of the fund dictate at least one-fourth of the net assets must be deployed in cash and bank deposits while investment in non-traded securities is capped at 15%. Credit risk exposure is capped at ‘A’ rated instruments apart from TFC/Sukuk where credit risk exposure is capped at ‘AA’. Actual asset allocation has been in-line with the investment policy during the review period with asset allocation primarily manifested in cash and PIBs. With the fund having exposure in ‘A+’ and above rated investment avenues, exposure to credit risk is considered manageable.

Weighted Average Maturity (WAM) of the fund’s assets has been capped at 5 years (excluding government securities), whereas duration of the fund can extend up to 1.5 years, signifying fund’s ability to assume moderate interest rate risk. A few violations of duration limits have been noted during the ongoing year. Adherence to the same will be tracked by JCR-VIS. Liquidity risk is mitigated through limit on maximum maturity of non-traded securities and investment in cash and near cash instrument of 25% at all times. Given the liquidity profile of assets and low unit holder concentration, ability of the fund to meet redemptions in a timely manner is considered strong.

Size of the fund was reported at Rs. 166m at end June’2016 with fund size further increasing to Rs. 249m at end October’2016.

For further information on this rating announcement, please contact the undersigned (Ext: 207) or Mr. Javed Callea (Ext: 201) at 35311861-70 or fax to 35311872.

Jamal Abbas Zaidi

Applicable Rating Criteria: Fund Stability Ratings (February 2012)

Information herein was obtained from sources believed to be accurate and reliable; however, JCR-VIS Credit Rating Company Limited (JCR-VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. JCR-VIS, the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report. JCR-VIS is not an NRSRO and its credit ratings are not NRSRO credit ratings. JCR-VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2016 JCR-VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to JCR-VIS.

JCR-VIS Credit Rating Company Limited