Press Release
VIS Reaffirms Fund Stability Rating of HBL Government Securities Fund
Karachi, January 02, 2024: VIS Credit Rating Company Limited has reaffirmed the Fund Stability Rating (FSR) of AA-(f) (Double A Minus (f)) to HBL Government Securities Fund (HBL-GSF). The FSR of ‘AA-(f)’ denotes high degree of stability in Net Asset Value. Risk is modest but may vary slightly from time to time because of changing economic conditions. The previous rating action was announced on December 29, 2022.
HBL GSF is an open-end fund with the objective of providing consistent returns through active investments in a blend of short, medium and long term securities issued and/or guaranteed by Government of Pakistan. During the period under review the fund’s Assets under Management (AUMs) increased to Rs. 776m as at June 30, 2023 from Rs. 631m as at June 30, 2022. The AUMs however remained notably lower when compared to peak of Rs. 1,071m as at June 30, 2021.
The reaffirmed rating reflects HBL GSF's sound credit quality and liquid investment portfolio. Investment Policy Statement (IPS) outlines a minimum of 70% of investments in Government Securities. However, ~67% of the net assets were deployed Government Securities, slightly below the required threshold. Major asset allocation includes Pakistan Investment Bonds (PIBs), T-Bills, Cash, TFC/Sukuks and commercial papers. The fund is required to invest in instruments that have a minimum credit quality rating of ‘A’ or higher. During the FY23, the fund has remained compliant to the offering document with majority of its investments in ‘AAA’ and ‘A+’ rated instruments.
As per offering document, Weighted Average Maturity (WAM) shall not exceed 4 years (1,460 days) whereas duration of the fund should not exceed 365 days. In FY23, monthly average WAM registered at 1,215 days (FY22: 1,493) while no breaches were noted in modified duration during the period under review. The fund has achieved a total return of 14.88% in FY23, underperforming the benchmark return of 18.14%. The fund however moved to the third quartile in FY23 from the last quartile in FY22 on the back of better performance as compared to its peers.
For further information on this ratings announcement, please contact Mr. Muhammad Amin Hamdani (Ext: 217) or the undersigned (Ext: 208) on 021-35311861-64 or email at info@vis.com.pk.
Syed Asif Ali
Executive Director
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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