Karachi, December 30, 2022 (PPI-OT):VIS Credit Rating Company Limited (VIS) has reaffirmed the Fund Stability Rating (FSR) for ABL Islamic Cash Fund (ABL ICF) at ‘AA+ (f)’ (Double A Plus (f)). The medium to long-term rating of ‘AA+’ denotes high degree of stability in NAV, risk is modest but may vary from time to time because of changing economic conditions. Previous rating action was announced on January 18, 2022.

Launched in February’ 2020, ABL ICF operates as a Shariah compliant money market fund with an aim to provide investors, with competitive returns by investing in low risk and highly liquid Shariah compliant money market instruments. During FY22, fund size notably increased significantly with net assets amounting to Rs. 16.1b (FY21: Rs. 7.5b) by end-FY22, registering a growth of 113%.

In order to cater to its mandate, the fund maintains low exposure to risk. Consequently, pre-defined limits have been stated in order to limit deployment in different asset classes. While the actual credit quality of exposures remained largely in line with VIS criteria and the Investment Policy Statement (IPS), however, the fund’s IPS states that ABL ICF is restricted to take minimum 10% exposure in bank placements.

Average cash holding was reported to be 80% during FY22 while bank placements were observed to be below the stipulated limit at many instances during FY22. Other investment avenues include of commercial paper and corporate Sukuks. There was also no breach in Weighted Average time to Maturity (WAM) and duration of the fund during the review period. Going forward, credit quality, liquidity and duration benchmarks in line with the IPS and the VIS criteria will remain important for the rating.

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/