The Pakistan Credit Rating Agency Limited
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Muhammad Zain Ayaz

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PACRA Maintains Stability Rating of AWT Money Market Fund

Rating Type Stability Rating
Action Maintain Initial
Long Term AA+(f) AA+(f)
Short Term - -
Outlook Stable
Rating Watch - -

The rating reflects AWT Money Market Fund's (Or the "Fund") sound credit risk profile emanating from the Fund's investment policy to invest in strong credit quality investment avenues with sound liquidity. The Fund was converted to money market category from asset allocation in Sep'21. At end of Sep'21, ~97% of Fund's assets were Placed in banks rated 'AA' and above. The investment policy of the Fund strictly prohibits investment in below 'AA' rated avenues, further at least 10% of the funds would remain invested in bank deposits/placements to maximize the Fund’s return. The assigned rating is based on investment philosophy of the Fund that was to invest in at least three 'AAA' rated banks or short-term government securities (3-months), capping its average quarterly duration at 60 days, hence maintaining low level of interest rate risk and strong liquidity profile. Going forward, in expectation of increasing interest rates, the Fund management is planning to switch bank placements to more liquid and secured avenues. The rating takes into account the investment objective of the Fund, which is to provide consistent returns with high level of liquidity. Fund's unit holding pattern is concentrated with top 10 investors representing ~99% of the net assets, of which ~81% are related parties, exhibiting low redemption pressure.
Going forward, the Fund aims to invest in Market Treasury Bills, bank placements and cash and bank deposits. All investments/placements will be in avenues rated "AAA"/Government Securities. Risk profile of the Fund will be monitored with the above stated investment policies. Material changes in the funds asset allocation strategy, impacting its credit quality and/or exposure to interest rate risk, would affect the rating.

About the Entity
AWT Investments Limited is a public unlisted company, incorporated in 2011. It is a Non-Banking Finance Company, licensed by the Securities and Exchange Commission of Pakistan to manage open and closed-end funds and Investment Advisory Services. The Company is a wholly owned subsidiary of Army Welfare Trust. The Board of Directors of the Company comprises five members, including the CEO Mr. Salman Haider. He possesses over two decades of local and international experience in Investment management industry including almost 10 years on Wall Street in New York, USA.

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.