Press Release

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

Karachi, August 4, 2014: 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)).

UGSF is designed to earn competitive returns while ensuring the element of capital protection by investing primarily in government securities. Investment guidelines of the fund state that 70% of the fund is to remain invested in government securities at all times. Restrictions on credit quality are stringent as the policy document does not allow investment in asset classes below rating of ‘AA-’. Average asset allocation of the fund in the out-going year has remained skewed towards sovereign instruments which comprised more than four-fifths of the asset base as at end-June 2014. The operational investment policy has capped Weighted Average Maturity (WAM) of the fund at 4 years while cap on duration has been increased to 2.5 year which was previously set at 1 year. Accordingly, the fund’s ability to assume interest rate risk has trended upwards.

Size of the fund has rallied up to Rs. 5.8b by end June 2014 in comparison to Rs. 1.9b at end June 2013. Growth has been partially been contributed by increased investment from related parties. Given the quality of assets and unit-holder profile, ability to meet redemptions in a timely manner is expected to remain strong.

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




Jamal Abbas Zaidi
Deputy CEO

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