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Karachi, VIS Credit Ratings Company Ltd. (VIS) has recently reaffirmed the Fund Stability Rating (FSR) of ‘AA+(f)’ for the Al Habib Money Market Fund (AHMMF), indicating a high degree of stability in its Net Asset Value (NAV) and modest risk that may fluctuate with economic conditions. This announcement follows the previous rating action on December 30, 2022.
According to VIS Credit Rating Company Limited, AHMMF, launched on December 20, 2021, is an open-ended money market fund aimed at providing unit-holders with optimal returns from low-risk, short-duration assets, while maintaining high liquidity. The fund, with its weighted average maturity (WAM) limited to 90 days, effectively mitigates potential losses due to changes in the discount rate. As of June 2023, the fund’s net assets increased significantly to Rs. 8.27 billion, up from Rs. 3.08 billion in June 2022.
The fund’s stable rating is supported by its strategic asset allocation, robust credit quality, and controlled liquidity risk. In FY23, AHMMF’s asset allocation aligned with its Investment Policy Statement, with a decrease in average cash allocation and an increase in Treasury bills. The fund adhered to its policy of investing in instruments with a minimum credit rating of ‘AA’, maintaining a portfolio with maximum credit quality of ‘AAA’ and a minimum of ‘AA’. Most of its investments are in government securities, indicating a portfolio with high credit quality and low credit risk.
Corporate investments dominate the fund’s portfolio, accounting for approximately 91% of the total Assets Under Management (AUM) from unrelated corporates as of June 2023. The fund’s year-to-date return, including dividends, was around 17.3%, marginally outperforming its benchmark of about 17.0% as of June 2023. However, its average monthly return during FY23 was 16.0%, slightly below the 17.0% benchmark. In comparison to its peers, AHMMF ranked in the third quartile.
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