Press Release
VIS Downgrades Fund Stability Rating of HBL Government Securities Fund
Karachi, December 29, 2022: VIS Credit Rating Company Limited (VIS) has downgraded the Fund Stability Rating (FSR) of HBL Government Securities Fund (HGSF) to ‘AA- (f)’ (Double A Minus (f)). The medium to long-term rating of ‘AA- (f)’ denotes high degree of stability on NAV. Risk is modest but may vary slightly from time to time because of changing economic conditions. Previous rating action was announced on January 03, 2022.
HGSF is an open-ended fund with the objective of offering investment opportunities in a diversified portfolio comprising short and long term guaranteed instruments. Assets under Management (AUMs) of the fund decreased considerably in the outgoing fiscal year and amounted to Rs. 631m as of Jun’22 (Jun’21: Rs. 1.1b). Fund’s duration is capped at 365 days while effective from Nov’21, the fund is restricted to take exposures in ‘A’ rated or above investment avenues, notching down from ‘AA-’ rated, with at least 70% in sovereign instruments. The revision in rating takes into account the changes in Offering Document (OD).
Some deviation was noted in the Weighted Asset Maturity (WAM) threshold of the fund during FY22. Maximum duration during the period under review stood at 284 days in Aug’21. Liquidity remained sound with investments majorly in liquid securities which also provided comfort against higher market risk exposure. More than 80% constitutes retail investors, accordingly investor concentration is viewed as satisfactory.
For further information on this rating announcement, please contact Mr. Arsal Ayub, CFA (Ext: 215) or the undersigned (Ext: 207) at 35311861-70 or email at info@vis.com.pk
Sara Ahmed
Director
Applicable rating criteria: Fund Stability Ratings (December 2020)
https://s3-us-west-2.amazonaws.com/backupsqlvis/docs/FundstabilityRating.pdf