Press Release
JCR-VIS Assigns Fund Stability Rating of BBB-(f) to United Islamic Income Fund
Karachi, December 08, 2010: JCR-VIS Credit Rating Company Ltd. (JCR-VIS) has assigned Fund Stability Rating of ‘BBB-(f)’ (Triple B Minus (f)) to United Islamic Income Fund (UIIF).
Launched in October 2007, UIIF is an open-end Aggressive Islamic Income Fund. The fund’s risk profile is considered weak in view of the quality of its existing holdings. A sizeable amount of assets have been recently restructured, with their proportion having increased over time on account of continuing redemptions in the fund. Individual counterparty exposures in the fund are sizeable, though the fund manager may have little room to alter asset mix, given the limited marketability of impaired assets. In view of this, liquidity risk is also considered moderately high. The AMC’s sponsoring bank features as the largest investor in the fund. JCR-VIS will continue to monitor asset quality for further impairment in NAV.
Markup rate risk on income instruments is considered low as these are pegged to market rates, though NAV remains susceptible to volatility arising from fluctuations in prices of instruments over a short term horizon attributable to low marketability of the same and changing perceptions of market with respect to credit profile of instruments. Month on month performance of the fund has depicted volatility. In the past, the fund’s rolling 12-month yield has been consistently positive, even if at times only marginal.
For further information on this rating announcement, please contact Ms. Sabeen Saleem, CFA (Ext: 510) or Ms. Sobia Maqbool, CFA (Ext: 506) at 021-35311861-70 or fax to 021-35311872-3.
Javed Callea
Advisor