Press Release

VIS Reaffirms Fund Stability Rating of UBL Growth and Income Fund

Karachi, December 29, 2022: VIS Credit Rating Company Limited (VIS) has reaffirmed the Fund Stability Rating (FSR) of UBL Growth and Income Fund (UGIF) at ‘A+(f)’ (Single A Plus (f)). The medium to long-term rating denotes moderate degree of stability in NAV. Risk factors may vary with possible changes in the economy. Previous rating action was announced on January 13, 2022.

United Growth & Income Fund (UGIF) was launched in 2006, as a fixed income fund with an aggressive asset allocation mandate. The fund offers investment opportunities in medium to long term fixed income instruments with risk adjusted returns while preserving the capital over the long-term. Net assets of the funds decreased in the outgoing fiscal year and amounted to Rs. 1.4b (FY21: Rs. 1.8b). Internal investment policy limits investments to ‘A-’ exposures while IPS of the fund states that weighted average time to maturity of the net assets, other than federal government securities, shall not exceed 5 years.

During FY22, the fund largely remained in compliance with the asset allocation and credit quality requisites for the assigned ratings as well as their IPS. Average asset allocation in FY22 in cash holdings accounted for about 41% while remaining assets were allocated in government securities comprising PIBs and T-Bills. The fund’s credit quality complied with the internal benchmarks as well as benchmarks for assigned rating. However, at end-July’21 a sizeable 34% of the net assets were parked in Non-Rated exposures. Liquidity remains adequate with high retail concentration (64%) and modest top-10 investor concentration (47%) in FY22. Moreover, the fund’s average modified duration (84 days) was well under the specified limit for the assigned ratings. Comparatively, fund performance depicted a downtick in FY22 with the fund underperforming its benchmark, although returns were reported higher against the peer average.

For further information on this rating announcement, please contact Ms. Asfia Aziz (Ext: 212) or the undersigned (Ext: 201) at 35311861-70 or email at info@vis.com.pk






Javed Callea
Advisor

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 December 29, 2022 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.