Karachi: VIS Credit Rating Company Limited has assigned an initial Fund Stability Rating of A+(f) to Faysal Islamic Financial Growth Plan-I, indicating a moderate degree of stability in its Net Asset Value amidst varying economic conditions. This marks a notable milestone for the fund which was launched in July 2023, aiming to offer competitive risk-adjusted returns through Shariah-compliant investments.

According to VIS Credit Rating Company Limited, Faysal Islamic Financial Growth Plan-I has demonstrated significant growth in Assets under Management since January 2024, peaking in June 2024. The fund’s investments are primarily in cash, which constitutes nearly half of its portfolio, with the remainder invested in short-term and Ijara sukuk. The credit quality of these investments is maintained within AA-rated exposures, aligning with the stringent criteria set forth in the fund’s offering document.

Despite the allowance for investments in below investment-grade and unrated securities, the management maintains a conservative stance by not investing below an A+ rating. Future revisions and implementations of the asset allocation policy will be crucial for maintaining the fund’s stability rating.

The rating also reflects considerations of liquidity and market risk. The fund adheres to a weighted average maturity of five years for its investments, excluding those issued by the government, which mitigates market risk due to the majority of the fund’s holdings being in cash deposits. While there is a high concentration of investments with the top 10 retail clients making up approximately 72% of the portfolio as of June 2024, the risk is moderated by the fund’s strategic allocation to cash and liquid securities, reducing potential redemption risks.