Press Release

VIS Reaffirmed Fund Stability Rating of Meezan Cash Fund

Karachi, December 29, 2023: VIS Credit Rating Company Limited (VIS) has reaffirmed the Fund Stability Ratings of Meezan Cash Fund (MCF) at ‘AA+(f)’ (Double A Plus (f)). Medium to long-term entity rating of ‘AA+’ reflects high degree of stability in Net Asset Value. Risk factors are modest but may vary slightly from time to time because of changing economic conditions. Previous rating action was announced on January 03, 2023.

Launched in June 2009, Meezan Cash Fund (MCF) is an open-end Shariah compliant money market scheme, managed by Al-Meezan Investment Management Limited. The objective of the fund is to seek maximum possible preservation of capital and a reasonable rate of return via investing primarily in liquid Shariah compliant money market and debt securities.

The fund size increased to Rs. 25.9b at end-June’23 (June’22: Rs. 13.5b). The management undertook a strategic portfolio realignment to optimize returns, leading to increased exposure to AA rated securities and decreasing investment in AAA rated instruments. The fund has breached the VIS credit risk criteria for the assigned rating during FY23, however, it became compliant during 5M’FY24. Going forward, adhering to the defined matrix will remain important to maintain rating.

In FY23, the fund's maximum Weighted Average Maturity (WAM) was reported well below the 180-day limit. As of June '23, the majority of the fund's assets under management (AUM) were held by retail investors. The concentration of investors in the fund remains low, with the top 10 investors accounting for 15% of the total AUMs as of June'23.

While the fund has consistently surpassed its benchmark return, it lagged behind compared to the peer averages and continued to be placed in the fourth quartile during the period under review.

For further information on this rating announcement, please contact Mr. M. Amin Hamdani (Ext: 217) or the undersigned (Ext: 208) at (021) 35311861-4 or email at info@vis.com.pk.




Syed Asif Ali
Executive Director

Applicable Rating Criteria: Fund Stability
https://docs.vis.com.pk/docs/FundstabilityRating.pdf

VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.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, 2023 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.