Press Release
VIS Reaffirms Fund Stability Rating of UBL Liquidity Plus Fund
Karachi, December 29, 2022: VIS Credit Rating Company Limited has reaffirmed the Fund Stability Rating (FSR) of UBL Liquidity Plus Fund (ULPF) at ‘AA+ (f)’ (Double A Plus (f)). The medium to long-term rating denotes high degree of stability in NAV. Risk is modest but may vary slightly from time to time because of changing economic conditions. The previous rating action was announced on January 13, 2022.
ULPF was launched with a mandate to provide competitive returns to unit-holders while maintaining a conservative risk profile and high liquidity. The fund’s offering document limits exposure to AA rated and above exposures, with exposure in cash & cash equivalents (including readily convertible T-Bills) to be maintained at least 20% of the net assets. During FY22, the fund recorded sizeable growth with assets increasing to Rs. 48.6b at end-June’22 from Rs. 30.5b at end-Jun’21 end. With some net redemptions, fund size of Rs. 43.6b was reported at end-Oct’22.
During FY22, the fund’s asset allocation remained in compliance with Offering Document. Major holdings during FY22 comprised cash balances averaging at 46.6% (FY21: 33.15%) followed by highly liquid T-Bills averaging 38% (FY21: 53%) of the asset base. On the credit quality front, the fund complied with the requirements of the offering document and VIS criteria for the assigned ratings. During FY22, on average, 90% of the fund’s investment portfolio was held with AAA rated issue/issuer and the remaining in AA+ and AA rated exposures, with a fractional investment in unrated instruments. Although the fund has less sticky retail investors (19%), comfort for meeting redemptions is drawn from sizeable liquid assets in the fund base. Investor concentration remains at higher level with top 10 investors accounting for 56% of total fund size at end-June’22.
The current investment policy limits Weighted Average Maturity (WAM) of the portfolio at 90 days while single asset maturity is limited at 180 days. During FY22, Weighted Average Maturity of the fund and average duration was recorded at 27 days and 21 days, respectively, which was in line with the policy and the benchmark for assigned ratings. The fund has continued to outperform its benchmark return in the review period.
For further information on this rating announcement, please contact Ms. Asfia Aziz (Ext: 212) or the undersigned (Ext: 201) at (021) 35311861-66 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