Press Release

VIS Reaffirms Fund Stability Rating of Faysal Cash Fund

Karachi, December 15, 2023: VIS Credit Ratings Company Ltd. (VIS) has reaffirmed Fund Stability Rating (FSR) at ‘AA+(f)’ (Double A Plus (f)). The medium to long-term rating of ‘AA+’ denotes high degree of stability in NAV; Risk is modest but may vary from time to time because of changing economic conditions. The previous rating action was announced on December 26, 2022.

Launched in January 2021, Faysal Cash Fund (FCF) is an open-ended money market fund, managed by Faysal Asset Management Limited. The objective of the scheme is to seek maximum possible preservation of capital and a competitive rate of return via investing primarily in money market securities.
The fund’s size recorded notable decline with Assets Under Management (AUM’s) reducing to Rs. 168m at end-June’23 from Rs. 1.4b at end June 22. While the fund remained compliant with its Investment Policy document with respect to credit quality, it remained short of VIS rating methodology credit quality benchmarks for the assigned rating. The fund increased its allocation to ‘AA+’ and ‘AA‘ rated securities to 31.3% and 23.2% respectively during FY23 (FY22 average: 16.1% and 17.5%), which is above the allowable threshold under VIS rating criteria for ‘AA+’ ratings. In addition, breaches in investment exposure limits outlined by the fund were also noted.

Investor concentration of the fund remained high with top 10 investors accounting for 87% of the fund size as of June’23. However, redemption risk arising from this is fairly mitigated by funds’ investments in liquid assets. In terms of performance, FCF has underperformed with respect to its benchmark and peer average, ranking in the lowest quartile. Going forward, maintenance of credit quality in line with VIS criteria for the assigned rating will remain important, coupled with relative performance of the fund.

For further information on this ratings announcement, please contact Mr. Muhammad Amin Hamdani (Ext: 217) or the undersigned (Ext: 207) on 021-35311861-64 or email at info@vis.com.pk.





Sara Ahmed
Director


Applicable Rating Criteria: Fund Stability (September 2018)
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 2023 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .