PACRA Maintains Stability Rating of JS Cash Fund
|Rating Type||Stability Rating|
The assigned rating reflects strong strength of the fund's credit, liquidity and interest rate risk profile. The fund's good credit quality and sound liquidity profile emanates primarily from its mandate to invest in government securities and other low duration avenues such as bank placement's and ensuring low exposure to interest rate risk. As per the investment policy, the fund shall invest in low risk and highly liquid, short duration assets including money market instruments. The fund may hold some or even all of its assets in cash to either provide liquidity or for defensive purposes. The time to maturity of any single asset shall not exceed six months and weighted average time to maturity of portfolio shall not exceed 90 days. At end Dec'20, ~96% of fund's assets were allocated to banks rated 'AA+' and above. Average duration of the fund remained within 45 days. Fund's unit holding pattern is highly concentrated with top 10 investors representing ~81% of the net assets; however, liquid nature of investments provide some comfort. The benchmark of the fund is 70% of three months PKRV rates + 30% three months average deposit rate of three 'AA' rated scheduled banks.
Going forward, the fund may maintain the exposure in banks depending on the prevailing market conditions. Material changes in the fund's asset allocation strategy, impacting its credit quality and/or exposure to interest rate risk, would affect the rating.
JS Investments Limited is one of the oldest private sector Asset Management Company in Pakistan. The company was established in 1995 and is listed on the Pakistan Stock Exchange. The Company is part of the Jahangir Siddiqui (JS) Group. JS Bank Limited holds ~85% shareholding in the Company. JS Group has strong presence in the financial sector with entities operating in banking, insurance, brokerage, and asset management sectors. The group has recently ventured into energy infrastructure and OMC segments. JS Investments possesses licenses for Asset Management Services, Investment Advisory, Private Equity and Venture Capital services. The Company has recently acquired REIT management license as well.
The Company’s board of directors comprises eight members including the Chief Executive Officer. The board is dominated by representatives of JS Bank Limited and Jahangir Siddiqui & Company Limited. The board has two independent directors while all the other directors are non-executive directors. The board members possess strong profile and skills suited to the financial services industry. Assets under management of the Company (CIS & VPS) stood at ~PKR 23,703mln at end Dec’20 and are spread across thirteen open-end mutual funds and two voluntary pension schemes. Investment platforms are provided to investors for both conventional and Islamic markets.