Press Release

VIS Reaffirms Fund Stability Rating of HBL Islamic Income Fund

Karachi, December 29, 2022: VIS Credit Rating Company Limited (VIS) has reaffirmed the Fund Stability Rating (FSR) of HBL Islamic Income Fund (HIIF) at ‘A+ (f)’ (Single A Plus (f)). The medium to long-term rating of ‘A+ (f)’ denotes moderate degree of stability in NAV. Risk factors may vary with possible changes in the economy. Previous rating action was announced on January 03, 2022.

HIIF is a Shariah Compliant open end fund which aims to provide investors comparable returns by investing in diversified pool of debt instruments, bank deposits and other approved investment avenues. Asset under Management (AUMs) increased significantly to Rs. 4.67b (Jun’21: 969m) as of Jun’22. As per Investment Policy Statement (IPS), fund’s duration is capped at 365 days while exposures are limited to a minimum of ‘A-’and above rated investment avenues.

During the period under review, asset allocation and credit quality of the fund remained in line with limits stipulated in investment policy guidelines. However, some breaches were noted vis-à-vis VIS’ credit risk criteria for the assigned rating. VIS will continue to monitor compliance with criteria on an ongoing basis.

More than 90% of the fund’s net assets is concentrated in cash placements and corporate TFCs/ Sukuks. Since last review, both Weighted Asset Maturity (WAM) and modified duration have remained compliant within the specified limit as per assigned ratings. The fund has outperformed vis-à-vis benchmark return rate during FY22. Moreover, based on 365 days return as of Jun’22, the fund’s return compares favorably to peers. The relative ranking of the fund improved since last review as the fund ranked in the first quartile. As at Jun’22, retail investor contribution to the fund’s total asset base has reduced and accordingly investor concentration leaves room for improvement.

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

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.