Press Release

VIS Reaffirms Fund Stability Rating of Meezan Islamic Income Fund

Karachi, January 06, 2025: VIS Credit Rating Company Limited (VIS) has reaffirmed fund stability ratings of Meezan Islamic Income Fund (MIIF) at ‘A+(f)’ (Single A Plus (f)). Medium to long-term entity rating of ‘A+’ reflects moderate degree of stability in Net Asset Value; risk factors may vary with possible changes in the economy. Previous rating action was announced on December 27, 2023.

Launched in January 2007, Meezan Islamic Income Fund (MIIF) is an open-end Shariah compliant income fund, managed by Al-Meezan Investment Management Limited. The objective of the fund is to provide investors with high and stable returns along with preservation of capital via investment in Shariah compliant assets. A secondary objective of the Fund is to take advantage of opportunities to realize capital appreciation.

The assigned rating reflects the Fund’s adherence to the asset allocation strategy outlined in the offering document. During FY24, shariah compliant government backed securities accounted for approximately half of the Fund’s portfolio, with remaining investments held in cash and Sukuks. Rating also incorporates the Fund’s credit quality, with investments largely in Govt Securities/AAA rated assets followed by investments in A rated instrument. However, the credit quality of the Sukuk portfolio has been impacted with non-performing exposures totaling about Rs. 412 million, for which 70% provisioning has been made. However, no provision is made against non-performing investment in Agha Steel and Shakarganj Food’s Sukuk forming around 07% of total the portfolio.

The weighted average time to maturity (WAM) of the Fund has consistently remained within the prescribed limits, barring the one specific month where the WAM deviated. Liquidity profile of the Fund is considered sound given the quantum of liquid assets held by the Fund. The Fund’s AUM is dominated by retail investors. Additionally, the Fund has low client concentration risk. In terms of performance, the Fund has outperformed its benchmarks. However, relative to its peers, the Fund is placed in the third quartile.

For further information on this ratings announcement, please contact at 021-35311861-64 or email at info@vis.com.pk.


Applicable Rating Criteria: Fund Stability Ratings
https://docs.vis.com.pk/docs/FundstabilityRating.pdf

VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf

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