Analyst
Hassaan Ahmad
Hassaan.Ahmad@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
PACRA Assigns Stability Rating to ABL Money Market Fund
Rating Type | Stability Rating | |
Current (22-Apr-24 ) |
||
Action | Initial | |
Long Term | AA+(f) | |
Short Term | - | |
Outlook | Stable | |
Rating Watch | - |
ABL Money Market Fund (or the “Fund”) is a low-risk profile Fund. The objective is to earn competitive returns for its investors while preserving capital to the possible extent, by investing primarily in Bank Deposits and Money Market Instruments. They include T-Bills, commercial papers, and certificates of deposits due to their low credit risk, making them suitable for investors seeking stability and preservation of capital. The AUMs of the Fund stood at PKR 927mln at the end Dec’23. The Fund had allocated ~25.72% in T-Bills and ~6.16% in bank rated in AAA category at the end of Dec’23, while in Feb’24 the fund had invested ~91.11% in T-bills. The duration and WAM of the Fund stood at 21 days at the end Dec’23, limiting exposure to interest rate and credit risk. The top 10 investors' concentration of the Fund, at Dec’23 was ~91.79%; exposing the Fund to a very high level of redemption pressure. Redemption pressure is addressed through the maintenance of sufficient liquidity through allocation in banks. During Dec’23, ABL Money Market Fund, posted an annualized return of 21.01% against the Benchmark return of 20.65% thereby outperforming the Benchmark by 36 bps.
Going forward, any material changes in the investment policy and/or compliance with the rating criteria for the assigned rating would have an impact on the ratings.
About
the Entity
Incorporated in 2007, ABL AMC is a wholly owned subsidiary of Allied Bank Limited (ABL). ABL operates with 1,400 plus branches including 117 Islamic banking branches, 8 Digital/ Self Service branches & 2 overseas branches. ABL AMC possesses licenses for asset management, pension management and investment advisory services. As the leading private sector asset management and investment advisory Company in Pakistan, offerings include a comprehensive range of both Conventional and Shariah Compliant investment solutions across all major asset classes. Assets under management of the Company stood at ~PKR 169.79bln at the end of Dec'23.