Islamabad: The Pakistan Credit Rating Agency Limited (PACRA) has once again affirmed the AA+(f) stability rating for the Alfalah GHP Money Market Fund, recognizing its consistent performance and low-risk profile. The fund maintains this top-tier rating with a stable outlook, reflecting its effective management and strategic investment choices.

According to The Pakistan Credit Rating Agency Limited, the Alfalah GHP Money Market Fund is designed to generate competitive returns from a portfolio primarily comprised of short-term instruments such as cash deposits, money market placements, and government securities. This strategy ensures that the fund maintains a high degree of liquidity, crucial for its operations and risk management.

As of the end of June 2024, the fund’s assets were allocated predominantly in treasury bills (55.5%), bank placements (31.2%), and a smaller proportion in Pakistan Investment Bonds (PIBs) and Commercial Papers (CPs), illustrating a conservative investment approach. The credit quality of the fund remains exceptionally high, with approximately 89.2% of assets rated AAA, further securing its financial stability.

The fund’s short duration of 84 days minimizes exposure to interest rate fluctuations, while the same duration also limits credit risk, aligning with the fund’s low-risk mandate. Furthermore, the concentration of assets among the top ten investors stands at 23.74%, indicating a moderate level of redemption risk which is well managed by the fund’s administrators.

PACRA notes that any significant changes in the fund’s investment policy or deviations from the rating criteria could influence future ratings, highlighting the importance of consistent policy adherence for maintaining its current rating.