Lahore, January 01, 2016 (PPI-OT): The Pakistan Credit Rating Agency (PACRA) has maintained the stability rating of JS Islamic Government Securities Fund (JS IGSF), an open-end Shariah compliant income fund, at ‘AA- (f)’ (Double A Minus; fund rating). The fund’s rating denotes a very strong capacity to manage relative stability in returns and very low exposure to risks. The investment mandate of the fund is to generate stable return for its unit holders while ensuring capital preservation by primarily investing in Shariah compliant government securities.
The rating reflects the fund’s low risk profile which emanates from its investment philosophy of maintaining a minimum exposure of 70% in Shariah compliant government securities (Ijarah Sukuks). The remaining assets of the portfolio are maintained as cash balances with high rated commercial banks.
At end Sep-15, the fund was primarily invested in Govt. Ijara Sukuks (Sep-15: 92%), with the rest kept as cash balances with high rated banks (‘A+’ and above). The fund’s exposure towards interest rate was quiet low with portfolio duration of 90 days at end-Sep15. The unit holding pattern of the fund has high concentration with top10 investors representing 95% of the net assets which exposes the fund to redemption pressure.
Going forward, the fund intends to maintain exposure to government securities (70%) and cash balances (30%). Material changes in the fund’s asset allocation strategy, which could negatively impact the fund’s credit quality and exposure to interest rate risk, remains critical for the rating. PACRA would monitor performance against agreed parameters on monthly average basis.
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