Press Release
JCR-VIS Assigns Fund Stability Rating of A+(f) to UBL Government Securities Fund
Karachi, March 29, 2012: JCR-VIS Credit Rating Co. Ltd. (JCR-VIS) has assigned initial Fund Stability Rating of ‘A+(f)’ (Single A Plus (f)) to UBL Government Securities Fund (UGSF).
Managed by UBL Fund Managers Limited, UGSF was launched on July 27, 2011 and is structured as an open-end income fund with an objective to achieve competitive returns with minimum risk, by investing primarily in government securities. Operational investment policy and actual asset allocation of the fund reflects low exposure to credit risk. Investment policy of the fund targets allocation of 70% to government securities and remaining assets are subject to minimum credit rating of ‘AA-’. At end-December 2011, investment in government securities represented 79% of net assets, while remaining assets comprised cash and bank balances with at least AA rated banks.
Given that maximum duration of the fund can go up to one year, the NAV’s susceptibility to interest rate risk is considered on the higher side. Weighted average maturity of the fund’s assets was 0.9 years at end-December 2011. By end-February 2012, this had been reduced to 0.43 years.
So far, returns posted by the fund are higher vis-à-vis benchmark. Fund size at end-December 2011 was Rs. 4.9b. Even though unit holding pattern reflects high concentration, the ability of the fund to meet redemptions in a timely manner is considered strong in view of the strong liquidity profile of assets. However, a more granular investor base will allow the fund manager to realize the long term strategy envisaged for the fund.
For further information on this rating announcement, please contact Mr. Javed Callea (Ext: 501) or Ms. Sobia Maqbool, CFA (Ext: 506) at 35311861-70 or fax to 35311872.
Jamal Abbas Zaidi
Deputy CEO