The Pakistan Credit Rating Agency Limited
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Muhammad Zain Ayaz

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PACRA Assigns Initial Stability Rating to Alfalah Islamic Rozana Amdani Fund

Rating Type Stability Rating
(19-May-21 )
Action Initial
Long Term AA(f)
Short Term -
Rating Watch -

Alfalah Islamic Rozana Amdani Fund (or the "fund") is an open ended shariah compliant market fund, managed by Alfalah GHP Investment Management Limited. In order to strengthen its relative position in Islamic money market category, Alfalah GHP Investment Management Limited has launched the Fund in Sep'20. The rating reflects the Fund's low credit risk profile emanating from the Fund's investment policy to invest in strong credit quality investment avenues with sound liquidity. On Dec'20, ~46% of Fund's assets were invested in banks rated 'AA' and above. Further, the investment policy of the Fund restricts investment in below AA rated avenues. The current weighted average maturity (WAM) of the Fund is 56 day which is in line with its stated investment policy. The rating takes comfort from the fact that quarterly weighted average duration of the Fund will be capped at 60 days which will allow the Fund to maintain low level of price risk and strong liquidity profile. The top 10 investors are representing ~93% of the total fund size of which ~15% are related parties, this reduces the redemption pressure on the Fund.
Going forward, the rating of the Fund will remain dependent upon maintaining its liquidity, credit quality and duration benchmark in line with its investment policy and PACRA rating criteria. The going forward strategy represents high liquidity and low risk profile, which bodes well to the rating.

About the Entity
Alfalah GHP Investment Management Limited was incorporated on October 18, 2004 as an unlisted public limited company and is licensed by the Securities and Exchange Commission of Pakistan to manage open-ended mutual funds and offer investment advisory services. The Company was established as joint venture Non-Banking Finance Company by Bank Alfalah Limited and GHP Arbitrium. The Company provides a wide range of mutual funds and pension funds both in conventional and Shariah compliant category. The Company also provides investment advisory services to the Company’s board of directors comprises eight members including the Chairman and the Chief Executive Officer. The board is dominated by representatives of MAB Investments and Bank Alfalah Limited. The board has two independent and five non-executive directors. The board members possess strong profile and skills suited to the financial services industry. Assets under management of the Company stood at ~PKR 50bln at end Dec’20 and are spread across fifteen open-end mutual funds and two voluntary pension schemes.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.