Press Release

VIS Reaffirms Fund Stability Rating of UBL Government Securities Fund

Karachi, December 29, 2022: VIS Credit Rating Company Limited (VIS) has reaffirmed the Fund Stability Rating (FSR) of UBL Government Securities Fund (UGSF) at ‘AA (f)’ (Double A (f)). The medium to long-term rating denotes high degree of stability in NAV. Risk is modest but may vary slightly from time to time because of changing economic conditions. Previous rating action was announced on January 13, 2022.

UGSF aims towards achieving the objective to earn competitive returns by investing primarily in sovereign instruments and government paper. The fund’s Offering Document (OD) points to a conservative credit risk profile limiting the exposure in sovereign instruments to a minimum 70% while remaining to be held in liquid cash, in order to preserve the liquid asset mix. As per IPS, Weighted average time to maturity of the net assets shall not exceed 4 years however this condition shall not apply to securities issued by federal government.

The fund size reduced by half during FY22 owing to higher redemptions than units issued. During FY22, the fund complied with the specified requisites of the offering document for asset allocation based on Calendar month averages. On the credit quality front, the fund complied with the credit quality requisites for the assigned ratings with sizeable investments in ‘AAA’ rated instruments (78% average). Exposure of 49% in ‘AA-‘category assets at end-June’22 was non-complaint with the stipulations of the assigned ratings of AA against allowed limit of 25%. Average modified average duration of the fund was recorded at 127 days in FY22 complying with the stipulations of the assigned rating and fund’s IPS, barring the month of Feb’22 where the same was reported at 201 days. Liquidity remained sound with investments majorly in liquid securities which provides comfort against higher market risk exposure. Retail proportion in the fund remains high (83%) while top 10 investor concentration (38%) is considered moderate.

For further information on this rating announcement, please contact Ms. Asfia Aziz (Ext: 212) or the undersigned (Ext: 201) at 35311861-70 or email at info@vis.com.pk







Javed Callea
Advisor

Applicable rating criteria: Fund Stability Ratings (December 2020)
https://docs.vis.com.pk/docs/FundstabilityRating.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, 2022 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.