Friday, December 9
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PACRA Maintains Stability Rating of UBL Cash Fund

Lahore, October 04, 2021 (PPI-OT): The rating reflects the strength of the Fund’s credit and interest rate risk profile. The Fund’s very low risk profile emanates primarily from its investment policy of maintaining a size-able proportion of placements with commercial banks having ‘AAA’ rating. At end Jun’21, ~99.5% of the funds’ assets were placed with ‘AAA’ rated Banks, which gives rise to concentration risk. The offering document of the fund allows it to invest in banks rated ‘AA’ and above. The duration is capped at 1 day, at end Jun’21, limits the exposure to interest rate volatility, and bodes well for the rating. Fund’s unit holding pattern is highly concentrated with top 10 investors representing 88% of the net assets, resulting in high redemption pressure on the Fund.

Going forward, the fund intends to maintain its asset allocation towards higher rated banks and may take exposure in short-term government securities in order to gain benefit from yield curve movements. Material changes in the planned 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