Press Release

JCR-VIS Reaffirms Fund Stability Rating of United Growth & Income Fund at A(f)

Karachi, November 04, 2009: JCR-VIS Credit Rating Company Limited has reaffirmed the Fund Stability Rating (FSR) of United Growth & Income Fund (UGIF) at ‘A(f)’ (Single A (f)) following the assessment of the fund’s risk profile post merger with United Money Market Fund. Both funds were managed by UBL Fund Managers Limited.

UGIF is an open-end income fund, investing in medium to long term fixed income instruments. The rating of the fund incorporates the asset composition post merger along the lines of the revised investment policy. Currently the fund has considerable deployment in Term Finance Certificates, with single party exposure also sizeable in relation to the size of the fund. Proportion of non-performing assets in the portfolio has declined on account of provisions created thereon. Despite the need for provisions, the fund has posted return of over 6% for FY09. With continuing stress on the earnings profile of the corporate sector, JCR-VIS will continue to closely monitor the risk profile of TFCs held by the fund. Over recent months, the fund has also build up a government paper portfolio represented mostly by t-bills, though this is mostly a short to medium term strategy in view of the current interest rate scenario and general level of risk averseness.

While average maturity profile of the fund’s assets is long term, duration was fairly low at under 180 days at the end of June 2009. Given the frequent changes in key policy rate, interest rate risk nevertheless remains, albeit limited.

There may be greater marketability risk attached to the fund on account of its significant holding of corporate bonds, with changes in prices of underlying instruments also having caused variation in NAV over FY09. The initiation of trading of listed instruments on the bourses is expected to facilitate price discovery of traded instruments over time. Liquidity risk in context of the unit-holding pattern also persists in view of the concentration related indicators, though given sizeable related party holding, withdrawal risk thereon is considered low.

For further information on this rating announcement, please contact Ms. Sabeen Saleem (Ext: 510) or Ms. Sobia Maqbool (Ext: 506) at 021-35311861-70 or fax to 021-35311872-3.



Safdar Kazi
Director

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited (VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.VIS , the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report.VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2009 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .