Pakistan Credit Rating Agency Limited assigns stability rating to AKD Aggressive Income Fund

Lahore, August 16, 2016 (PPI-OT):The Pakistan Credit Rating Agency (PACRA) has assigned stability rating of “BBB+(f)” (Triple B Plus ; fund rating) to AKD Aggressive Income Fund (AKDAIF), an open-end aggressive fixed income fund. The fund’s rating denotes an adequate capacity to manage relative stability in returns and high exposure to risks.

Fund’s objective is to invest in a diversified portfolio of fixed income securities/instruments that provide consistent returns with long term capital preservation. At end-Jun 16, fund has 17% exposure in Government securities while cash exposure is 8.54% with majority of exposure in AA+ rated bank. 24% of the fund’s assets are placed with banks and NBFCs (i.e. 15% with A+ rated banks and 9% with A- rated banks).

The fund’s exposure towards TFCs/ sukuk represents 16% with TFC of the bank rated ‘A’ and sukuks with rating ‘AA-‘ and ‘A+’. Fund has also invested its assets in MTS (7%) and spread transactions (22%). The unit holding pattern of the fund is highly concentrated with top 10 investors (i.e. 90%) exposing fund to redemption pressure. The fund’s current asset mix highlights low credit risk profile. The assigned rating takes into account the fund’s overall risk appetite which exposes fund towards high risk.

Going forward, fund intends to maintain its exposure with the same investment avenues. The fund will invest in debt instruments with rating not less than BBB+. Material changes in the fund’s asset allocation strategy, which could negatively impact the fund’s credit quality and exposure to interest rate risk, remain critical for the rating.

For more information, contact:
Hammad Rashid
Analyst
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425
Email: hammad.rashid@pacra.com
Web: www.pacra.com