PACRA Maintains Stability Rating of Pakistan Income Enhancement Fund
|Rating Type||Stability Rating|
Pakistan Income Enhancement Fund (or the ‘Fund’) is a medium risk-profile fund. The Fund aims to provide optimum returns through active management of aggressive investment strategy in debt and fixed income market. The Fund had invested ~24% of its net assets in banks rated ‘A’ and above. This enhances the liquidity profile of the Fund. As of end-Jun’21, the Fund had invested ~37% of its net assets into spread transactions. The Fund had allocated ~24% and 11% of its net assets to TFCs and T-Bills respectively as at end-Jun’21. The Weighted Average time to Maturity (WAM) was 1.5 years as at end-Jun’21, the fund is compliant its investment policy with regard to WAM. The assigned rating reflects the moderate strength of the Fund's credit and interest rate risk profile. The unit holding pattern of the Fund is moderately concentrated with top ten investors representing ~41% of the Fund's assets, which subject the Fund to a moderate level of redemption pressure.
Going forward, the Fund may alter its allocation with banks and take a diversified exposure in TBills, and spread transactions keeping in view the market expectations. Material changes in the Fund's asset allocation strategy, impacting its credit quality and/or exposure to interest rate risk, would affect the rating.
MCB-Arif Habib Limited Savings and Investments Limited (MCB-AH or the "Company") is a public listed company, regulated by the SECP. MCB-AH holds licenses for Asset Management, Investment Advisory, and Pension Fund Management. MCB-AH was incorporated in 2000 as Arif Habib Investments Limited and subsequently merged with MCB Asset Management Company in 2011, to achieve synergies in asset management business and access to a wider distribution network. Pursuant to the merger, the name of the Company was changed to MCB-Arif Habib Savings and Investments Limited. MCB-AH caters to both conventional and Shariah-compliant clientele and is currently managing a diverse product slate of fifteen open-end funds and two voluntary pension schemes. MCB-AH is also managing one of the largest AUMs under the SMA segment and holds a significant position in the investment advisory domain.
The major shareholders of MCB-AH are MCB Bank Limited ~51%, Arif Habib Corporation Limited ~30%, and Adamjee Insurance Company Limited ~8%. The general public holds the remaining ~11% of the shares. MCB-AH's control vests in an eight-member board of directors, including the CEO. There are four non-executive directors, while three directors are independent. The AUMs (CIS & VPS) of MCB-AH increased to ~PKR 97,679mln at end-Jun'21 (Dec'20: ~PKR.82,721mln).