Karachi, December 29, 2017 (PPI-OT):JCR-VIS Credit Rating Co. Ltd. (JCR-VIS) has upgraded the Management Quality Rating of UBL Fund Managers Limited (UBL FM) to ‘AM-1’ (AM-One) from ‘AM-2++’ (AM-Two Plus Plus). Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on December 30, 2016.
The rating upgrade of UBL FM takes into account broad based improvement across key performance areas including investment management, fund performance, control framework and growth and diversity in Assets under Management (AUMs). Overall governance framework draws support from professional management team, superior board oversight in relation to peers, along with adequate risk management practices.
Since last review, investment process has been fine-tuned with decision making more centralized and a greater research orientation. Strength and experience of investment management team are consistent with the assets being managed, backed by adequate analytical resources and clear segregation of responsibilities. Going forward, the reorganization is envisaged to entail regular monitoring and feedback, along with systematic performance evaluation and benchmarking against peer group funds. Changes in the investment process are reflected in improved fund performance during 2017. Based on JCR-VIS risk adjusted return model, performance of funds under management ranked ahead of peers in the ongoing year. Continuity of the same over a longer time horizon is considered important.
The rating reflects various measures taken by the company to institute a culture of sound governance and compliance that emanates from the Board of Directors and cascades down the organizational hierarchy. Control framework is supported by sound audit, compliance and IT infrastructure. The risk and control framework provides multi-level assessment of business and fund risks. Significant enhancements have been made in the enterprise risk management framework which compares favourably to peers.
UBL FM is a prominent player in the mutual funds industry. The AMC offers a comprehensive product suite of 23 mutual funds/investment schemes spanning across asset classes including equity, income, money market and asset allocation funds. AUMs (adjusted for fund of funds) have crossed Rs. 70 billion in FY17; growth in AUMs was accompanied by significant increase in retail investor base which accounts for over half of total AUMs. Growth in AUMs has been broad based with sizeable increase in active clients during FY17 and all distribution channels recording healthy growth in sales. Going forward, maintaining market share and diversity in AUM profile in line with benchmark for the assigned rating is considered important. The rating would remain underpinned to the continuity of all the performance indicators outlined above.
For more information, contact:
JCR-VIS Credit Rating Company Limited
VIS House, 128/C,
25th Lane off Khayaban-e-Ittehad,
Phase VII, DHA, Karachi