Karachi, December 31, 2015 (PPI-OT): JCR-VIS Credit Rating Company Limited (JCR-VIS) has revised the Fund Stability Rating of ABL Income Fund (ABL IF) to ‘A(f)’ (Single A(f)) from ‘A+’ (Single A plus(f)). Last rating action was taken on October 16, 2014.
ABL Income Fund (ABL-IF) is an open end fund launched in September 2008. The operational policy of the fund asserts that a quarter of assets must be deployed in cash and near cash instruments. Furthermore, TFC and Sukuk exposure and reverse repo against the same have been separated during the year. Spread transaction including Margin Trading System is also included with allowable allocation of 0-10%.
Asset mix experienced considerable variation in FY15. On month-end average basis, 21% assets were deployed in cash and bank balances. This allocation was increased at end-FY15 to 50% in order to gain advantage of attractive rates offered by banks. Average sovereign and corporate debt exposures equalled 56% and 10%, respectively during the year.
Compared to previous year, the fund exceeded internal duration limits on multiple occasions during the year. This increases market risk of the fund which may lead to a negative revaluation of the underlying assets in case there is a hike in discount rate, going forward. Given that the weighted average maturity and duration has surpassed JCR-VIS’s internal criteria, the risk profile of the fund is no longer commensurate with the previous outstanding rating.
For more information, contact:
Ms. Sobia Maqbool
JCR-VIS Credit Rating Company Limited
VIS House, 128/C,
25th Lane off Khayaban-e-Ittehad,
Phase VII, DHA, Karachi