Press Release

VIS Reaffirms Management Quality Rating of UBL Fund Managers Limited
 

Karachi, December 31, 2021: VIS Credit Rating Company Ltd. (VIS) has reaffirmed the Management Quality Rating of UBL Fund Managers Limited (UBL FM) at ‘AM1’ (AM-One). ‘AM1’ rating denotes excellent management characteristics exhibited by the asset manager. Outlook on the assigned rating remained same at ‘Stable’. Previous rating action was announced on December 31, 2020.

The assigned ratings incorporate UBL FM’s market position as the third largest AMC in the industry at end Fiscal Year (FY) ‘21. Market share has witnessed slight decline over time standing at 9.69% (FY20: 10.14%) in FY21. Retail concentration remains low with growth emanating from corporates mainly. AUM mix depicts further shift towards Fixed Income and Money Market funds although contribution of equity funds also registered an increase over last year. SMAs portfolio declined in a deliberate move to consolidate number of relationships given sizable number of SMA mandates. Performance of SMA portfolio performed well above the benchmark return during FY21.

Rating takes into account the presence of a formalized and documented investment process with sound investment research infrastructure. Corporate Governance framework in place is considered adequate, with Board & Board Committees being in place. Rating also factors in UBL FMs efforts to increase outreach through increased digitalization which shall remain the key focus area in the current year. The Company is aggressively focusing on several digital solutions to enhance retail clientele. Resources have been invested in the same.

Fund performance of leading money market and income funds remained sound with respect to assigned benchmarks and peers. Equity funds performance during FY21 weakened relative to peers as the funds continued to invest in fundamentally strong scrips while upside was mostly registered in speculative stocks in the outgoing year. However, the trend has reversed in the current year. Overall fund performance remained satisfactory with improvement noted in the ongoing quarter.

Profitability in the current Calendar Year (CY) has improved compared to same period last year on account of higher core income and rationalization of expenses. Company’s plan to spend on digitalization of operations and digital marketing campaigns to expand customer base will be executed in CY22. Conservative capital structure lends support to financial profile. The assigned ratings remain dependent on recouping market position and AUM profile while low retail concentration in the total AUM base leaves room for improvement. The Company is contesting certain regulatory actions with respect to some customer grievances, outcome of which will be evaluated by VIS.

For further information on this rating announcement, please contact Ms. Sara Ahmed or the undersigned (Ext: 204) at (021) 35311861-66 or email at info@vis.com.pk .

Faryal Ahmad Faheem
Deputy CEO


Applicable Rating Criteria: Asset Management Companies (June 2019)
https://docs.vis.com.pk/docs/AMC-Methodology-201906.pdf

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Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited (VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.VIS , the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report.VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2021 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .

VIS Credit Rating Company Limited