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Karachi: Following the revision in fund stability rating methodology, JCR-VIS Credit Rating Company Limited has harmonized the fund stability rating (FSR) of Meezan Sovereign Fund (MSF) from ‘AA+(f)’ (Double A Plus(f)) to ‘AA(f)’ (Double A (f)).
MSF is structured as a government securities income fund. As per its investment policy, at least 70% of net assets have to be invested in government securities. Moreover, remaining exposure will primarily be maintained as cash and bank balances with banks having rating in the ‘AA’ band. Thus, overall exposure of the fund to credit risk is expected to be limited. Target duration of the fund, as outlined in the investment policy is 90 days; though, there may be instances, where duration of the fund may exceed 90 days as there are no GOP Ijarah sukuks with maturity profile lower than six months and profit rate of GoP Ijarah Sukuks is reset after every six months. JCR-VIS will continue to monitor the frequency of such instances for impact on risk profile of the fund.
Net assets of the fund have grown significantly since inception increasing to Rs. 19.7b by end-February 2012. The investor profile features concentration; though, the ability of the fund to meet redemptions in a timely manner is backed by strong liquidity profile of investments. The fund may nevertheless benefit from a diversified investor base.
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