Karachi, December 30, 2016: JCR-VIS Credit Rating Co. Ltd. (JCR-VIS) has reaffirmed the Fund Stability Rating of UBL Government Securities Fund (UGSF) at ‘A(f)’ (Single A (f)). The previous rating action was announced on January 06, 2016.
UGSF is designed to generate returns by minimizing risk, through investment in government securities. The operational policy of the fund has established afloor of 70% in relation to investment in government securities. Credit risk exposure is also minimized as the fund restricts investment in asset classes rated below ‘AA-'. Actual asset allocation has remained in line with the specified guidelines, as sovereign instruments comprised approximately 81% of the net assets in FY16 on average basis.
Duration of the fund has remained in line with investment policy; the same decreased in the outgoing year reflecting lower exposure to interest rate risk. Moreover, investor concentration in the fund has trended downwards on timeline basis. Given the quality of assets and unit-holder profile, ability to meet redemptions in a timely manner is expected to remain strong.
Fund size more than doubled in the outgoing year. At end-FY16, fund size was reported at Rs. 14.0b (FY15: Rs. 6.3b) which increased further to Rs. 15.5b at end-September’2016.
For further information on this rating announcement, please contact the undersigned (Ext: 201) or Mr. Javed Callea (Ext: 201) at 35311861-70 or fax to 35311872.
Jamal Abbas Zaidi
Applicable Rating Criteria: Fund Stability Ratings (February 2012)
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