Press Release

VIS Reaffirms Management Quality Rating of UBL Fund Managers Limited

Karachi, December 31, 2020: VIS Credit Rating Co. Ltd. (VIS) has reaffirmed the Management Quality Rating of UBL Fund Managers Limited (UBL FM) at ‘AM-1’ (AM-One). The assigned rating of ‘AM-1’ (AM-One) signifies that the asset manager exhibits excellent management characteristics. Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on December 31, 2019.

The rating assigned to UBL FM is underpinned by the company’s market positioning as the 4th largest AMC in Pakistan. Even though growth in company’s AUMs exceeded the industry during FY20, the same has remained lackluster during Q1’FY21 resulting in a drop in market share during the period under review. Growth in AUMs, realized during the period, mainly manifested in money market funds, and emanated from the company’s corporate clientele, as a result of which investor concentration has trended up on timeline. These changes have been noted and incorporated into the assigned rating; VIS will continue to closely monitor these parameters.

The ratings derive impetus from UBL FM’s diverse product portfolio. The company remains at the forefront in terms of product innovation and demonstrated the same by launching an ETF during FY20, by the name of UBL Pakistan Enterprise ETF. Ratings are supported by the company’s sound governance framework as reflected by professional management team, satisfactory board oversight, along with adequate risk management and control framework. The investment decision making process is well-structured and formalized.

Ratings also take into account UBL FM’s outreach, both physical and digital, which has allowed the company to gain a sizable retail clientele. UBL FM operates via 26 branches and 16 distributor outlets spread across Pakistan. During the outgoing year 2 new branches have been added. The company also maintains a presence in the Middle East. Overall retail AUMs of the company dropped, in proportionate terms, from 50% to 43% of aggregate AUMs in FY20.

Fund performance has also been reviewed for the period. Fixed income and money market fund performance remained broadly aligned with overall industry returns, while performance of the equity asset class remained in 1st and 2nd quartile. The main fund of Islamic Equity namely Al-Ameen Shariah stock fund continued to be on top in June 2020 & October 2020.


For further information on this rating announcement, please contact Mr. Arsal Ayub (Ext: 216) or the undersigned (Ext: 306) at (021) 35311861-66 or email at info@vis.com.pk.




Faryal Ahmad Faheem
Deputy CEO

Applicable Rating Criteria: Asset Management Companies Rating (June 2019)
https://s3-us-west-2.amazonaws.com/backupsqlvis/docs/AMC-Methodology-201906.pdf

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