Press Release

VIS Reaffirms Fund Stability Rating of Faysal Islamic Savings Growth Fund

Karachi, December 15, 2023: VIS Credit Ratings Company Ltd. (VIS) has reaffirmed Fund Stability Rating (FSR) of ‘A+ (f)’ (A Plus (f)) to Faysal Islamic Cash Fund (“FISGF” or “the Fund”). The medium to long-term rating of ‘A+’ denotes moderate degree of stability in Net Asset Value; Risk factors may vary with possible changes in the economy. The previous rating action was announced on December 13, 2022.

Launched in July 2010, Faysal Islamic Savings Growth Fund (FISGF) is an open end income fund, managed by Faysal Asset Management. The objective of the fund is to provide maximum possible preservation of capital and a reasonable rate of return via investing in Shariah Compliant money market and debt securities having good credit quality rating and liquidity.

The fund’s Assets Under Management (AUMs) remained fairly stable at Rs. 2.7b (June’22: Rs. 2.8b) as at June’23. During FY23, on monthly average basis, fund’s portfolio was mostly invested in Cash (~31.4%), Sukuk, TFC and COI (~33.4%) and GoP Ijara (~20.5%). However, breaches were noted in the fund allocation during the year. Between Jul’22 and Dec’22 and in May’23, the fund failed to adhere to the prescribed exposure limit for cash and cash equivalents. Furthermore, the fund exceeded its investment limit in a single entity, surpassing the permissible 15% threshold between Sept’22- Nov’22 and Mar’23 - May’23. Breach in investment limit within a single sector was also noted in Apr’23 and May’23. Continuation of breaches, going forward, may exert pressure on rating.

FISGF’s credit quality remained aligned with the VIS methodology for the assigned rating as well as funds Investment Policy (IPS) restricting minimum exposure at 'A-' rated issue/issuer. While during the year, the fund experienced a notable shift towards ‘A‘ rated instruments, it was offset by increasing its holdings of ‘AAA’ and AA+ rated entities/securities. The fund’s duration remained within the limit of 180 days. The top-10 client concentration stood at 80.3% as at June’23, which is considered high from a ratings perspective, as it exposes the fund to higher redemption risk. In terms of return, FISGF provided total return of 14.3% in FY23 compared to the benchmark return of 6.1%; however, trailing behind its peer average of 15.8%. Fund performance in the fourth quartile.

For further information on this ratings announcement, please contact Mr. Muhammad Amin Hamdani (Ext: 217) or the undersigned (Ext: 207) on 021-35311861-64 or email at info@vis.com.pk.





Sara Ahmed
Director

Applicable Rating Criteria: Fund Stability (September 2018)
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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