Press Release
JCR-VIS Reaffirms Fund Stability Rating of Meezan Cash Fund
Karachi, October 28, 2014: JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed the Fund Stability Rating (FSR) of Meezan Cash Fund (MCF) at ‘AA(f)’ (Double A (f)). The previous rating action was announced on August 15, 2013.
Asset allocation of the fund has remained in line with the regulatory guidelines which stipulate minimum issue/issuer rating of AA and maximum Weighted Average Maturity (WAM) of 90 days. Based on month end averages, bank balances represented almost three-fourths of assets during FY14. While short term Shariah compliant instruments have yet to be introduced by the government, reducing time to maturities of previously issued long term instruments has allowed the fund to build exposure in GoP Ijarah Sukuk as well over the last two years. Given the maturity profile, the fund’s sensitivity to changes in market benchmark rates is expected to remain minimal. Unit-holder concentration levels compare favorably to other funds, with sizeable investment from retail investors.
In line with trend in market rates, return of the fund has declined over the year. Given the asset allocation, fund’s returns are to some extent contingent upon deposit rates offered by banks. Moreover, volatility in prices of GoP Ijarah Sukuk, stemming from demand and supply factors, may continue to have some impact on returns.
For further information on this rating announcement, please contact Mr. Javed Callea (Ext: 501) or Ms. Sobia Maqbool, CFA (Ext: 604) at 35311861-70 or fax to 35311872-3.
Jamal Abbas Zaidi
Deputy CEO
Applicable rating criteria: Fund Stability Ratings (February 2012)