PACRA maintains Stability Rating of MCB Pakistan Fixed Return Fund

MCB Pakistan Fixed Return Fund (the ‘Fund’) is a very low risk-profile open-ended fund. The duration of the Fund is perpetual; however, allocation plan(s) launched by MCBIM under this Fund may be perpetual or may have fixed maturity. The objective of the Fund is to provide an attractive fixed return at maturity of the Allocation Plans, by investing in Fixed Income Securities. Since the Fund is not directly offering its units to the investor, rather offering shall only be made through allocation Plans launched from time to time under the umbrella of this Fund.
Currently, MCB Pakistan Fixed Return Plan X, XIII, XVI and XVII are under the umbrella of the Fund. The plans will invest in authorized avenues to meet investment objectives, with the Management Company ensuring promised returns valid for investors staying invested until plan maturity. Investment avenues for the plans are Government securities, cash, money market placements, certificates of deposits and musharakas, and TDRs.
MCB Pakistan Fixed Return Plan X has invested 87.5% in PIBs and ~10.5% in AAA-rated bank as of Oct'23. The WAM and duration of the Fund stood at 52 days as of Oct’23, exposing the plan to low credit and interest rate risk. The top ten investor concentration stood at ~76.3% as of Oct’23; exposing to redemption pressure. Since the plan has fixed maturity plan hence, the redemption pressure is on the lower side.
MCB Pakistan Fixed Return Plan XIII has invested 99.3% in T-Bills and ~0.7% in AAA-rated bank as of Oct'23. The WAM and duration of the Plan stood at 238 days as of Oct’23, exposing the plan to high credit and interest rate risk. However, since the investment is in GoP Ijara Sukuk, the credit risk is at a manageable level. The top ten investor concentration stood at ~99.62% as of Oct’23 exposing to high redemption pressure. The plan has a fixed maturity plan hence, the redemption pressure is on the lower side.
MCB Pakistan Fixed Return Plan XVI has invested 99.8% in T-Bills and ~0.1% in AAA-rated bank as of Oct'23. The WAM and duration of the Plan was 351 days at end of Oct’23, exposing the plan to low credit risk. However, since the investment is in GoP Ijara Sukuk, the credit risk is at a manageable level. The plan has fixed maturity plan hence, the redemption pressure is on lower side.
MCB Pakistan Fixed Return Plan XVII has invested 79.3% in T-Bills and ~0.5% in bank. The WAM and duration of the Plan was 399 days, exposing the plan to high credit risk. However, since the investment is in GoP Ijara Sukuk, the credit risk is at a manageable level. The plan has fixed maturity plan hence, the redemption pressure is on lower side.
Going forward, any material changes in the Fund's asset allocation strategy, impacting its credit quality and/or exposure to interest rate risk, would affect the rating.

About the Entity
MCB Investment Management Limited (MCBIM or the "Company") is a Public Listed Company, regulated by the SECP. MCBIM holds licenses for Asset Management, Investment Advisory, and Pension Fund Management. MCBIM caters to both conventional and Islamic clientele and is currently managing a diverse product slate of nineteen open-end funds and two voluntary pension schemes. MCBIM is also managing one of the largest AUMs under the SMA segment. The major shareholders of MCBIM are MCB Bank Limited ~81.42%, and Adamjee Insurance Company Limited ~7.59%. The general public holds the remaining ~11% of the shares. Mr. Khawaja Khalil Shah is the CEO of the company. There are four non-executive directors, three directors are independent and one CEO. The AUMs of MCBIM stood at PKR 155bln at end-Oct'23.