Press Release

JCR-VIS Reaffirms Fund Stability Rating of BMA Empress Cash Fund

Karachi, October 23, 2014: JCR-VIS Credit Rating Company Limited has reaffirmed the Fund Stability Rating (FSR) of BMA Empress Cash Fund (BECF) at ‘AA+(f)’ (Double A Plus(f)). The previous rating action was announced on June 20, 2013.

The investment policy of BECF is designed to restrict the fund’s exposure to credit and interest rate risks. Policy guidelines require at least 50% of the assets to be maintained in T-Bills, with other exposures subject to minimum rating of ‘AA’. Actual asset allocation of the fund has depicted variation; while month end average allocation to t-bills was around 68% of assets, there were instances where the fund’s exposure to T-Bills fell below the threshold, defined in the internal Investment Policy Statement (IPS). Moreover, there were instances where the fund’s duration was slightly higher than the threshold in IPS, though largely remaining within the ceiling of 60 days. JCR-VIS will continue to monitor the actual asset allocation vis-à-vis the policy guidelines for any deviations.

The fund size has witnessed considerable volatility in FY14, touching a peak of Rs. 1,024m and a low of Rs. 390m. At end-September 2014, net assets were reported at Rs. 437m. Although there has been a marginal increase in retail holding, overall investor profile still features concentration. Given the credit and liquidity profile of assets, ability to meet redemptions is considered strong. Given the fund’s exposure to various sources of risks, returns are likely to remain consistent unless there are changes in policy rate.

For further information on this rating announcement, please contact Mr. Javed Callea (Ext: 501) or Ms. Sobia Maqbool, CFA (Ext: 604) at 021-35311861-70 or fax to 021-35311872-3.



Javed Callea
Advisor

Applicable Rating Criteria: Fund Stability Ratings (February 2012)

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