Press Release
VIS Upgrades Fund Stability Rating of UBL Income Opportunity Fund
Karachi, October 16, 2020: VIS Credit Rating Company Limited (VIS) has upgraded the Fund Stability Rating (FSR) of UBL Income Opportunity Fund (UIOF) (formerly UBL Financial Sector Bond Fund (UFBF)) to ‘A(f)’ (Single A(f)) from A- (f) (Single A Minus (f). The previous rating action was announced on December 31, 2019.
UIOF is designed as an income fund with an objective of generating competitive returns primarily through investment in cash & near cash instruments, government securities, bank deposits and TFC/Sukuk. The rating upgrade incorporates change in the investment policy statement (IPS) of the fund, whereby the fund will take maximum 15% exposure in ‘A-’ rated exposures, with the remaining exposure being in ‘A’ and above rated instruments/placements; apart from TFC/Sukuk, where credit risk exposure is capped at ‘AA’ and above. The upgrade also takes in account the revised cap on duration of the fund at 1.25 years. Actual duration has remained in line with the threshold.
Net assets of the fund declined to Rs. 607m by end-FY20. Minor deviations have been observed in the Actual asset allocation plan of the fund. Credit quality exposure manifests that over 40% of the fund’s assets were placed in AAA rated issue/issuer. With exposure of the fund primarily in liquid avenues, ability of the fund to meet redemptions is considered adequate.
For further information on this rating announcement, please contact Mr. Arsal Ayub (Ext: 216) or the undersigned (Ext: 207) or Mr. Javed Callea (Ext: 201) at (021) 35311861-66 or email at info@vis.com.pk.
Javed Callea
Advisor
Applicable Rating Criteria: Fund Stability Ratings (September 2018)
https://s3-us-west-2.amazonaws.com/backupsqlvis/docs/Fund%20stability%20Rating092018.pdf