Lahore, August 20, 2021 (PPI-OT):The rating incorporates Pak Oman Advantage Islamic Income Fund’s (or the “Fund”) moderate risk level. The ratings also incorporates the Fund’s objective to provide competitive returns and long term capital growth by investing in diversified portfolio of Shariah Compliant Securities. The asset allocation comprises of ~76% as cash placements in banks having minimum rating of ‘A-‘ and ~22.75% invested in Sukuks having minimum credit rating of ‘AA-‘. The current investment strategy is in line with the policy, while the policy restricts the investments below ‘A-‘ rated avenues.

The average duration of the fund was 151 days at end Jun’21. The unit holding pattern of the fund is highly concentrated where ~98.7% is represented by top 10 investors. However, ~55% of the fund size are investments made by the Management Company itself and related parties which reduces the risk of redemption pressure. During 2HFY21, the Fund’s performance remained above benchmark and industry averages.

Going forward, the management of the fund intends to maintain its exposure in debt instruments which may impact the duration. Meanwhile, the fund plans to remain invested in sound credit quality banks. Material changes in the fund’s asset allocation strategy, impacting its credit quality and/or exposure to interest rate risk, would affect the rating.

For more information, contact:
Analyst,
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore, Pakistan
Tel: +92-42-5869504-6
Fax: +92-42-5830425
Email: hammad.rashid@pacra.com
Website: www.pacra.com