Karachi: The Pakistan Credit Rating Agency Limited (PACRA) has reaffirmed the stability rating of the JS Government Securities Fund at ‘AA(f)’ with a stable outlook as of October 22, 2024. This rating underscores the fund’s commitment to preserving capital while offering returns superior to those of commercial bank deposits with similar liquidity profiles.

According to The Pakistan Credit Rating Agency Limited, the JS Government Securities Fund is characterized by a low-risk profile, primarily investing in high-security instruments. As of the end of June 2024, the fund had allocated approximately 94.1% of its assets in Treasury Bills and 5.6% in bank placements, with a minor portion in Pakistan Investment Bonds and other securities. This investment strategy highlights the fund’s focus on government and AAA-rated securities, which comprise about 99.81% of its investments, reflecting a strong credit quality.

The Weighted Average Maturity (WAM) and duration of the fund were reported at 237 days, indicating a considerable exposure to credit and interest rate risks. However, these risks are mitigated by the fund’s strategic investment approach and robust risk management practices.

The concentration of investments with the top ten investors poses a significant redemption pressure, representing about 100% of the fund’s unit holding pattern. To manage this, the fund maintains sufficient liquidity to address potential large-scale redemptions.

PACRA notes that any significant changes in the fund’s investment policy or alterations in the rating criteria may impact future stability ratings. The reaffirmation of the ‘AA(f)’ rating reflects the agency’s confidence in the fund’s ability to manage risks effectively while providing stable and reasonably high returns to its investors.