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JCR-VIS assigns initial capital protected fund rating to Al-Ameen Islamic Principal Preservation Fund III

Karachi, January 18, 2016 (PPI-OT): JCR-VIS Credit Rating Company Ltd. (JCR-VIS) has assigned initial capital protection rating of ‘CP3’ to Al Ameen Islamic Principal Preservation Fund (AIPPF III- Dynamic Hedge Fund [DHF]) which denotes a moderate certainty of principal protection.

JCR-VIS assigns rating to all funds following Static and Dynamic Hedge categories of capital protection strategies on a common scale, ranging from CP1 to CP5 with CP1 having the highest certainty of capital protection. The capital protection rating comments on the degree of certainty of capital protection and does not comment on the return potential of the fund. Moreover, the rating denotes the level of expected capital protection at the maturity of the scheme and does not comment on the capital protection in periods prior to maturity.

AIPPF III was launched in June’2014 as an open-end Shariah Compliant Fund of Funds Scheme. The fund has an investment horizon of 2 years and follows a Constant Proportion Portfolio Insurance (CPPI) Dynamic Hedge based strategy that features varying asset allocation between an equity fund, i.e. Al-Ameen Shariah Stock Fund (ASSF), and Al Ameen Islamic Cash Fund (AICF).

Investment of the underlying equity fund, ASSF, primarily comprises exposure to blue chip companies while AICF has an outstanding fund stability rating of AA (Double A) denoting low exposure to credit, liquidity and market risk. During the initial term, the fund had followed a relatively aggressive allocation towards equities which has reduced subsequently; allocation to ASSF stood at 52% at end-December’2015.

With nearly 5 months left to maturity, adequate liquidity build-up and a return since inception of 10.7% (till December’2015), the fund has moderate certainty of capital protection at maturity. The management has pursued a conservative approach by utilizing a profit lock in strategy through which around 3% of the profits of the fund have been allocated towards fixed income portion thereby adding further margin to capital protection. Unit holding concentration in the fund is low.

For more information, contact:
Ms. Sobia Maqbool
CFA
JCR-VIS Credit Rating Company Limited
VIS House, 128/C,
25th Lane off Khayaban-e-Ittehad,
Phase VII, DHA, Karachi
Tel: +92-21-35311861-72
Fax: +92-21-35311873
Email: sobia@jcrvis.com.pk

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