Press Release

VIS Reaffirms Fund Stability Rating of UBL Income Opportunity Fund

Karachi, January 09, 2025: VIS Credit Ratings Company Ltd. (VIS) has reaffirmed Fund Stability Rating (FSR) at ‘AA-(f)’ (Double A Minus (f)). The medium to long-term fund rating of ‘AA-’ 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, 2023.

Launched in March 2013, UBL Income Opportunity Fund (UIOF) is an open-end income fund managed by UBL Fund Managers Limited. The investment objective of the fund is to provide a competitive rate of return to its investors by investing in quality TFCs / Sukuks, Government Securities, Bank Deposits, and short and long-term debt instruments.

Assigned rating takes into account the Fund’s asset allocation, with Assets Under Management (AUM) experiencing a significant increase of ~113% during FY24. During this period, the Fund’s investments largely adhered to the parameters as laid out in the offering document with deployment in cash, T-Bills, PIBs, TFCs/Sukuks and PIB-Fixed. The Fund were Assigned rating also incorporates the credit quality of the Fund. While the offering document allows for investments not below investment grade, the management has internally set a stricter benchmark, limiting investments to a minimum of A- rated instruments. The Fund’s asset allocation shifted towards AAA rated exposures followed by increase in allocations to the AA- rated assets. The remaining funds were invested in AA and AA+ rated assets. Going forward, the management may consider revising the minimum rating to AA- for maintaining the assigned rating.

The weighted average time to maturity (WAM) remained in line. Additionally, client concentration risk is considered moderate as the Fund’s portfolio is primarily held by retail investors, with the remainder contributed by the corporate investors. With respect to the Fund’s performance, the Fund outperformed both against its benchmark and peer average.

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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