Press Release

VIS Reaffirms Fund Stability Rating of Faysal Government Securities Fund
 

Karachi, August 1, 2022: VIS Credit Rating Company Limited (VIS) has reaffirmed Fund Stability Rating (FSR) assigned to Faysal Government Securities Fund (FSGF) at ‘AA (f)’ (Double A (f)). Last rating action was announced on May 18, 2021.

Launched in March 2020, Faysal Government Securities Fund (FGSF) is an open-ended income fund, managed by Faysal Asset Management Limited. The fund’s objective is to provide competitive returns to its investors by investing primarily in Government Securities.

Reaffirmation of rating takes note of the fund’s sound credit quality and liquid investment portfolio. FGSF’s Investment Policy Statement (IPS) outlines a conservative risk profile with investments limited to minimum ‘AA- ‘rated issue/issuer. The fund’s asset allocation plan remained compliant with the stipulated requirements of the fund’s operational investment policy statement and VIS criterion during the period under review. Assets Under Management (AUM) continued to remain engrossed in T-bills and cash. Credit quality During the year, on an average, more than half of the fund’s investment portfolio was held in ‘AAA’ rated issue/issuer while the remaining was invested in ‘AA’ and ‘AA-‘rated exposures with a fractional investment in unrated instruments. WAM of the fund is capped at 4 years and target duration of the fund has been capped at 6 months, for which the fund majorly complied during the period under review.

Investor concentration of the fund has improved with addition of new retail investors, which was previously dominated by few corporates. However, outflows on account of corporate funds, have led to reduction in the size of the fund. Average fund size in FY22 was recorded at Rs. 525m compared to Rs 1.9b in FY21, while AUMs as of June 30, 2022 were recorded at Rs. 610m. Due to the small size, investor concentration remains on the higher side. However, given the fund’s liquid investment allocation portfolio, ability to meet redemptions is considered adequate. Fund performance has remained subdued with the fund largely underperforming the benchmark return and the peer average. Improvement in fund performance remains important for rating, going forward.

For further information on this rating announcement, please contact Ms. Sara Ahmed (Ext: 207) at 021-35311861-70 or email at info@vis.com.pk



Sara Ahmed
Director

Applicable Rating Criteria: Fund Stability Ratings (December 2020)
https://docs.vis.com.pk/docs/FundstabilityRating.pdf

________________________________________________________________________________________________________________________________
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 2022 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .

VIS Credit Rating Company Limited