Karachi, VIS Credit Rating Company Limited has reaffirmed the Fund Stability Rating of Meezan Cash Fund at ‘AA+(f)’, signifying a high degree of stability in Net Asset Value amidst modest, variable risk factors influenced by economic conditions. This update follows the previous rating action taken on January 03, 2023.

According to VIS Credit Rating Company Limited, Meezan Cash Fund, a Shariah-compliant money market scheme managed by Al-Meezan Investment Management Limited since June 2009, aims to preserve capital and earn a reasonable rate of return by investing in liquid Shariah-compliant money market and debt securities.

The fund experienced significant growth, with its size increasing to Rs. 25.9 billion at the end of June 2023, up from Rs. 13.5 billion in June 2022. A strategic portfolio realignment aimed at optimizing returns resulted in greater exposure to AA-rated securities and a reduced investment in AAA-rated instruments. Although the fund briefly breached the VIS credit risk criteria for its rating during FY23, it returned to compliance within the first five months of FY24. Continued adherence to the defined risk matrix will be crucial for maintaining the current rating.

For FY23, the fund's maximum Weighted Average Maturity (WAM) remained well under the 180-day limit. As of June 2023, retail investors held the majority of the fund's assets under management. The concentration of top 10 investors in the fund was modest, accounting for 15% of the total assets as of June 2023.

Despite consistently outperforming its benchmark return, Meezan Cash Fund trailed behind peer average returns and was positioned in the fourth quartile during the review period.