Press Release

VIS Reaffirms Fund Stability Rating of UBL Income Opportunity Fund

Karachi, December 29, 2022: VIS Credit Rating Company Limited (VIS) has reaffirmed the Fund Stability Rating (FSR) of UBL Income Opportunity Fund (UIOF) at ‘AA- (f)’ (Double A minus (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.

UIOF is 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. Net assets of the fund slightly decreased from Rs. 2.2b to Rs. 2.1b at year-end FY22. As per management’s internal investment policy, exposures are limited to ‘A-’ and above rated investment avenues while maximum duration is benchmarked at 180 days. The fund’s actual duration was well within the IPS and benchmark for assigned rating.

During FY22, asset allocation and credit quality of the fund majorly complied with limits stipulated in investment policy. The fund’s major holding on average during the year was engrossed in cash at 41% and T-Bills and PIBs at 36% cumulatively. TFCs recorded a larger share of asset allocation relative to previous year, however remained limited to requisites outlined in the OD. On the credit quality front, although the fund complied with its IPS, deviations against the rating criteria was noted in the year (Nov’21 till Feb’22) whereby exposures in ‘A+’ instruments was noted above 15% of the asset base. Liquidity profile of the fund remains adequate in terms of liquid assets, retail AUMs (84%) and top-10 investor concentration (35%). The fund during the outgoing year underperformed against its benchmark rate and the peer average. Maintenance of credit quality metrics in line with benchmarks for the assigned rating along with improvement in performance metrics will be important for rating, going forward.

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.