Press Release

VIS Downgrades Fund Stability Rating of Askari Sovereign Yield Enhancer

Karachi, March 3, 2022: VIS Credit Rating Company Limited has downgraded the Fund Stability Rating (FSR) of Askari Sovereign Yield Enhancer (ASYE) to ‘A+ (f)’ (Single A Plus (f)). The previous rating action was announced on December 31, 2020.

Askari Sovereign Yield Enhancer is an income fund investing in a pool of sovereign and fixed income debt instruments to generate a relatively higher yield than bank and other money market placements. The Investment Policy Statement (IPS) of ASYE stipulates a minimum rating ‘A+’ for Term Deposits and reverse repo transactions against government securities as well as for TFCs and Sukuks. For all other placements, the threshold is ‘A-’.

Assigned ratings take into account breach in minimum regulatory requirement of net assets under management and credit quality deterioration, wherein exposure in ‘A+’ and below rated instruments remained above 15%, in breach of the VIS benchmarks for the assigned level of ratings, although, asset allocation remained in compliance with IPS.

Liquidity of the portfolio improved with sizeable exposure in cash and government securities, in compliance with the funds mandate, however top ten investor concentration deteriorated further. The weighted average maturity (WAM) of the portfolio as per IPS is capped at 4 years. On account of relatively larger proportion of PIB holdings during the year, WAM of the portfolio witnessed an increase but within IPS prescribed thresholds.
Ratings also take into account consistent underperformance of the fund against their benchmark return during FY21. Relative performance of the fund also slipped to lowest among its peers. Going forward, fund’s performance, credit quality and improvement in fund size will remain important for the rating.
For further information on this rating announcement, please contact Ms. Sara Ahmed (Ext: 207) or the undersigned (Ext: 201) at 35311861-70 or email at info@vis.com.pk




Javed Callea
Advisor

Applicable rating criteria: Fund Stability Ratings (December 2020)
https://docs.vis.com.pk/docs/FundstabilityRating.pdf

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