Press Release

JCR-VIS Reaffirms Fund Stability Rating of UBL Government Securities Fund

Karachi, April 18, 2013: JCR-VIS Credit Rating Co. Ltd. (JCR-VIS) has reaffirmed the Fund Stability Rating of UBL Government Securities Fund (UGSF) at ‘A+(f)’ (Single A Plus (f)).

As a government securities fund, UGSF has to maintain at least 70% of its net assets in government securities. Moreover, the operational investment policy of the fund has defined minimum counterparty credit rating requirement of ‘AA-’ for investment in avenues other than government securities. On an average, in FY12 and 1HFY13, exposure in government securities remains sizeable; moreover, based on month-end position, the exposure has remained above 70% of net assets. Based on this, the exposure of the fund to credit risk is expected to remain on the lower side. Exposure of the fund to interest rate risk may vary from low to moderate, depending on the interest rate outlook of the fund management team, though; duration is envisaged to remain under 1 year, as per policy. At end-Dec’12, duration of the fund was well within this limit.

Annual and since inception return of the fund have been above benchmark which is defined as sum of ‘70% PKRV rate and 30% 3-m deposit rate of highly rated banks’. Even though concentration in investor profile is high, in view of strong liquidity profile of the fund’s investments, its ability to meet redemptions in a timely manner is considered sound. However, with greater diversity in investor profile, the fund manager will have greater room to implement the envisaged investment strategy for the fund.

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




Javed Callea
Advisor

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