JCR-VIS Upgrades Fund Stability Rating of Faysal Savings Growth Fund to AA-(f)

Karachi, November 21, 2012 (PPI-OT): JCR-VIS Credit Rating Company Ltd. (JCR-VIS) has upgraded the fund stability rating of Faysal Savings Growth Fund (FSGF) to ‘AA-(f)’ (Double A Minus(f)) from ‘A+(f)’ (Single A Plus(f)).

Investment strategy of the fund as envisaged in the operational investment policy reflects a risk-averse approach for taking fresh exposures in the fund. As per the policy, 90% of the exposures taken by the fund have to be rated ‘AA-’ or higher; moreover, investment in ‘A+’ rated exposures cannot comprise more than 10% of net assets. Actual asset allocation of the fund at end-Oct’12 is largely in line with the operational investment policy with almost 98% of the fund’s assets deployed in exposures having a credit rating of ‘AA-’ or higher; credit risk assumed by the fund is on the lower side.

Actual duration of the fund was close to the maximum policy duration of 180 days and is targeted to remain below this threshold, going forward. Given the frequent changes in benchmark interest rates, maintaining duration of the fund at manageable levels continues to be a key rating consideration.

Net assets of the fund by end-Oct’12 stood at Rs. 1.7b, lower than the prior year’s level. While concentration in investor profile has reduced on a timeline basis as few large investors exited the fund, it remains on the higher side. Nevertheless, the fund’s ability to meet redemptions in a timely manner is considered sound owing to sound liquidity profile of its investments.

For more information, contact:
Mr. Javed Callea
Advisor
JCR-VIS Credit Rating Company Limited
Tel: +9221 35311861 (10 lines) (Ext: 501)
Fax: +9221 35311872-3
E mail: javed.callea@jcrvis.com.pk

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