Karachi: VIS Credit Rating Company Limited (VIS) has assigned an initial Fund Stability Rating of 'A+ (f)' to the HBL Financial Sector Income Fund Plan-I, known as HBL-FSIFP-I. This medium to long-term rating indicates a moderate degree of stability in the plan's net asset value, with potential risk factors that may change depending on economic conditions.

According to a statement by VIS Credit Rating Company Limited, HBL-FSIFP-I was launched on January 18, 2022. The plan aims to enhance income and preserve capital by investing in high-quality financial sector term finance certificates (TFCs)/Sukuks, bank deposits, and short-term money market instruments.

The rating reflects the plan's credit quality and asset allocation strategy. In the fiscal year 2024, the asset allocation remained consistent with the offering document's mandate, with most investments held in cash. The remainder of the assets were invested in placements with banks and development finance institutions (DFIs), government-backed securities, MTS/spread transactions, and TFC/Sukuks.

The plan's credit quality is also a factor in the rating, with investments maintained in assets rated above 'A' as per the investment policy. The weighted average time to maturity (WAM) is capped at four years according to the plan's investment policy statement, and the average WAM during fiscal year 2024 was 258 days, indicating prudent management of investment duration.

The liquidity profile of the plan is considered sound, with a significant portion of investments held in liquid assets. Client concentration is assessed as moderate. The plan's annualized return exceeded its benchmark, further demonstrating its performance within the set parameters.