Press Release

VIS Reaffirms Fund Stability Rating of Faysal Government Securities Fund

Karachi, October 28, 2024: VIS Credit Rating Company Limited (VIS) has reaffirmed the Fund Stability Rating (FSR) of Faysal Government Securities Fund (‘FGSF’ or ‘the Fund’) at ‘AA (f)’ (Double A (f)). Medium to long-term rating of ‘AA’ denotes high degree of stability in NAV. Risk is modest but may vary slightly from time to time because of changing economic conditions. Previous rating action was announced on October 04, 2023.

Launched in March 2020, FGSF is an open-ended mutual fund categorized as an income fund and managed by Faysal Asset Management Limited, with an aim to provide competitive returns by investing primarily in Government Securities, offering units to retail and institutional investors.

The assigned rating reflects the Fund’s asset allocation strategy, which has generally adhered to the parameters outlined in the offering document for most of the year, although it has fallen short of its threshold in certain months. The Fund's portfolio is primarily composed of government securities, which make up more than half of its total investments, with the remaining portion held in cash. Fund's Assets Under Management (AUM) remained fairly stagnant throughout the year, only slightly exceeding the minimum fund size threshold. Additionally, the assigned rating takes into account the Fund’s credit quality, as it maintains exposures in securities rated AA- and above, in accordance with the stipulations in the offering document.

The weighted average maturity (WAM) of the Fund has consistently remained below the limits specified in the offering document. The liquidity profile of the Fund is deemed sound, considering the substantial amount of liquid investments it holds. The Fund's clientele primarily consists of retail investors, who account for approximately 94.4% of its AUMs. Furthermore, client concentration is notably high, as the top ten investors represent 99.99% of the Fund's portfolio. In terms of performance, the Fund has underperformed relative to both its benchmark and peer average, reporting negative returns in January and February 2024, and is positioned in the fourth quartile compared to its peers.

For further information on this ratings announcement, please contact at 021-35311861-64 or email at info@vis.com.pk

Applicable Rating Criteria: Fund Stability Ratings
https://docs.vis.com.pk/docs/FundstabilityRating.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf

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 2024 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .