Karachi, December 30, 2022 (PPI-OT):VIS Credit Rating Company Limited (VIS) has assigned initial Fund Stability Rating (FSR) to AL Habib Money Market Fund (AHMMF) at ‘AA+ (f)’ (Double A Plus (f)). ‘AA+ (f)’ denotes high degree of stability in NAV. Risk is modest but may vary slightly from time to time because of changing economic conditions. Launched in December 2021, AL Habib Money Market Fund’s investment objective is to provide its unit-holders optimum returns from a highly liquid portfolio of very low risk assets.
Assigned rating takes note of fund’s strong credit quality and liquid investment allocation. The funds Offering Document (OD) encompasses a conservative risk profile restricting investments to be made in ‘AA’ rated and above entities/instruments. Barring few instances, the fund’s asset allocation plan remained compliant with the requirements stipulated in the fund’s operational investment policy statement. On an average, the fund has maintained exposures in Cash and T-bills. Credit quality during the year also remained in line with the assigned rating, with on average greater than 98% of assets placed in ‘AAA’ rated instruments/entities. Rating also takes into account the Weighted Average Maturity (WAM) of the fund, which is capped at 90 days in order to reduce exposure to any adverse movement in interest rates. The fund complied with the same.
Being a relatively new fund, investor pool is small. Top10 investors account for 98% of the fund’s investment portfolio, depicting higher concentration and redemption pressure. However, this risk is fairly mitigated due to liquid portfolio composition of the fund. Liquidity of the fund is considered strong owing to major placements in cash or T-bills of smaller tenors. During the first year of incorporation, the fund largely outperformed its benchmark return, however, year to date performance of the fund as of Oct 2022 lagged behind peers, with average return below peer average. Improvement in fund performance remains important for rating, going forward.
For more information, contact:
Director Compliance and Rating Analytics,
VIS Credit Rating Company Limited
VIS House, 128/C, 25th Lane off Khayaban-e-Ittehad,
Phase VII, DHA, Karachi, Pakistan
Tel: +92-21-35311861-72
Fax: +92-21-35311873
Email: bilal@jcrvis.com.pk
Website: https://www.vis.com.pk/