PACRA Upgrades Stability Rating of Lakson Money Market Fund

Lahore, March 12, 2021 (PPI-OT): The rating upgrade incorporate the placement of fund’s assets in highly liquid and secure investment avenues having limited exposure to market risk. The rating reflect the fund’s strong credit quality, robust liquidity and low exposure to interest rate volatility. The fund aims to invest in a liquid portfolio of low risk short-term investments with low volatility.

The fund’s investment policy dictates placing fund’s assets with instruments having a maturity of less than six months and the weighted average maturity of the portfolio shall not exceed by three months. This enhances the interest rate risk profile and liquidity profile of the fund. The fund shall invest only in instruments rated ‘AA’ and above which strengthen the fund’s credit risk profile. At end Dec’20, ~97% of fund’s assets were deposited with ‘AAA’ rated banks.

Average duration of the fund remained within 45 days. Fund’s unit holding pattern is highly concentrated with top 10 investors representing ~71% of the net assets; however, due to the highly liquid nature of the fund’s assets the fund has an adequate ability to meet redemption pressure.

Going forward, in accordance with the investment policy and market expectations, the fund may consider to maintain its exposure in ‘AA+’ and higher rated investment avenues. Material changes in the fund’s asset allocation strategy, impacting its credit quality and/or exposure to interest rate risk, would affect the rating.

For more information, contact:
Analyst,
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore, Pakistan
Tel: +92-42-5869504-6
Fax: +92-42-5830425
Email: hammad.rashid@pacra.com
Website: www.pacra.com

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