Karachi: The Pakistan Credit Rating Agency Limited (PACRA) has maintained the stability rating of the Faysal MTS Fund at ‘AA-(f)’ with a stable outlook as of October 22, 2024. The rating reflects the fund’s low risk profile and commitment to providing competitive returns through investments primarily in the MTS (Margin Trading System) market.

According to The Pakistan Credit Rating Agency Limited, the Faysal MTS Fund is designed to offer investors competitive returns by allocating a significant portion of its portfolio to the MTS market. As of the end of June 2024, the fund had 71.31% of its investments in unrated MTS avenues, showcasing a focused investment strategy tailored to experienced investors seeking exposure to this specific market.

The fund’s asset allocation also included 18.21% in cash and bank placements, and 5.48% in Treasury Bills, with the remaining assets distributed among other categories. This diversification helps balance the fund’s risk, despite the predominant focus on the MTS market.

The Weighted Average Maturity (WAM) of the fund was 39 days as of June 2024, which positions the fund to manage credit risk effectively. Moreover, the duration of the fund stood at 0 days, indicating no exposure to interest rate risk due to the immediate or near-immediate liquidity of the assets.

While the fund’s asset quality remains robust, a concentration of about 49.2% of assets among the top ten investors does present a moderate level of redemption pressure. This necessitates careful liquidity management to accommodate potential large withdrawals without impacting the fund’s performance.

PACRA notes that any significant adjustments in the fund’s investment policy or changes in the rating criteria could impact future stability ratings. The continued ‘AA-(f)’ rating demonstrates PACRA’s confidence in the fund’s ability to meet its investment objectives while managing associated risks.