PACRA Maintains Stability Rating of Pakistan Cash Management Fund

Pakistan Cash Management Fund (or the 'Fund') is a very low risk-profile fund. The rating reflects the Fund's good credit quality, interest rate risk and sound liquidity profile emanating primarily from its mandate to invest in government securities and other low duration avenues such as bank placements, ensuring low exposure to interest rate risk. The fund size grew by 3.6x since Jun'21. According to rating criteria, the Fund should invest 50% of AUMs in 'AAA' rated avenues to maintain its assigned rating. At end Dec'21, the Fund had allocated 100% of its net assets in AAA rated avenues. The remarkable credit quality of the Fund's allocation enables it to maintain the stability of return. The Weighted Average time to Maturity of the Fund was 41 day as at end-Dec'21, which is compliant with the investment policy. The average duration of the Fund remained within 45 days. The Fund's unit holding pattern is highly concentrated with top 10 investors representing ~70% of the net assets; however, the highly liquid nature of Fund's assets is able to cope up the redemption pressure.
Going forward, the Fund may continue its asset allocation in low tenor government securities, subject to economic and market expectations. Material changes in the Fund's asset allocation strategy, impacting its credit quality and/or average duration, would affect the rating.

About the Entity
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 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. Mr. Saqib Saleem is the CEO of the Company. 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 110,012mln at end-Dec'21 (Jun'21: ~PKR 97,679mln).