Press Release
JCR-VIS Reaffirms Management Quality Rating of ABL Asset Management Company Limited
Karachi, December 31, 2015: JCR-VIS Credit Rating Company Ltd. (JCR-VIS) has reaffirmed the Management Quality Rating of ABL Asset Management Company Limited (ABL AMC) at ‘AM2’ (AM-Two) with a ‘Stable’ Outlook. The previous rating action was announced on December 31, 2014.
ABL Asset Management Company Limited (ABL AMC) is a wholly owned subsidiary of Allied Bank Limited (ABL); the former has been in operations since 2007. ABL AMC is characterized by adequate board oversight and experienced senior management team, improving fund performance and satisfactory investment management process.
Market share of the company has shown a small decrease to 5.5% (FY14: 6.2%) at end FY15 after adjustment for associates and fund of funds; percentage of retail investor AUMs has increased on a timeline basis. AUMs of the company have recovered since then, amounting to Rs. 30.4b at end Nov15 (Nov14: Rs. 26b). Although concentration of investors in AUMs continues to be high, the same has shown some improvement compared to the previous year.
Performance of the funds has showcased improvement on a timeline basis; all funds having outperformed their respective benchmarks. Out of the 8 open end funds, 6 funds are featured in the top quartile whereas 2 funds are featured in the 2nd quartile as compared to peers. However, given the declining interest rate scenario, risk profile of certain fixed income funds has displayed an increase to achieve aforementioned performance.
A formalized investment process is in place with all key management personnel represented on the Investment Committee (IC) with decision making being consensus based. Best practices in this regard also warrant Head of Risk Management to be voting member on the IC. Risk Management and Compliance function have been segregated since the last review. Both of these functions report directly to the CEO. However given the growing size and complexity of the organization, oversight capacity of control functions may be improved further by hiring additional resources in the same.
For further information on this rating announcement, please contact Mr. Javed Callea (Ext: 501) or Jazib Ahmed, CFA (Ext: 510) at 35311861-70 or fax to 35311872-3.
Jamal Abbas Zaidi
Advisor
Applicable Rating Criteria: Mutual Fund Rating (December 2006)
http://jcrvis.com.pk/Images/MFund-20061201-2.pdf