Karachi: The Pakistan Credit Rating Agency Limited (PACRA) has reaffirmed the stability rating of the JS Income Fund at ‘A+(f)’ with a stable outlook as of October 22, 2024. This consistent rating highlights the fund’s strategic management and diversified investment approach, emphasizing its medium-risk profile amidst a challenging economic environment.
According to The Pakistan Credit Rating Agency Limited, the JS Income Fund has maintained a varied portfolio, focusing on investment-grade debt securities, government securities, and money market instruments. As of the end of June 2024, the fund allocated about 10.6% of its assets in Sukuk/Term Finance Certificates (TFCs), 42.3% in Pakistan Investment Bonds (PIBs), 15.0% in Treasury Bills, and 29.0% of the net assets in bank placements, with the remaining 3.2% invested in other avenues.
The fund’s investment strategy has significantly fortified its liquidity profile, with a considerable holding in cash and bank balances. The credit quality of the Fund’s portfolio as of June 2024 was predominantly secure, with approximately 67.96% invested in government or AAA-rated avenues, while the remainder was spread across A+ to AA+ rated securities.
Despite the strong liquidity position, the Weighted Average Maturity (WAM) of the fund was reported at 646 days, indicating a high credit risk. However, the duration of the fund stood at 88 days, which limits its exposure to interest rate risk, thus balancing its overall risk profile.
The concentration of investments with the top ten investors was notably high at 91.75% as of June 2024, suggesting a significant level of redemption pressure. This potential risk is systematically managed by maintaining sufficient liquidity to accommodate large-scale withdrawals if necessary.
PACRA noted that any future changes in the fund’s investment policy or modifications in the rating criteria might impact the assigned stability rating. The reaffirmation of the ‘A+(f)’ rating reflects PACRA’s confidence in the fund’s ability to manage risks effectively while providing stable returns to its investors.