Management Quality Rating of United Bank reaffirmed

Karachi: JCR-VIS Credit Rating Co. Ltd. (JCR-VIS) has reaffirmed the Management Quality (MQ) Rating of UBL Fund Managers Limited (UBL Funds) at ‘AM2’ (AM-Two). Outlook on the rating is ‘Stable’.

UBL Funds had nine collective investment schemes and two pension funds under management at end-December 2011; all of these are open-end schemes. Apart from the aggressive income schemes (United Growth and Income Fund and United Islamic Income Fund), the remaining fixed income/money market schemes (UBL Liquidity Plus Fund, UBL Savings Income Fund, UBL Islamic Savings Fund, UBL Government Securities Fund) are mostly invested in risk free assets.

The difference in portfolio strategy of these funds mostly arises on account of variation in interest rate risk exposures. In line with increasing risk, there is some difference in the return of these funds in relation to each other.

The year-to-date performance of ULPF is close to the peer group median while returns of other income funds compare more favorably to their respective peers. United Stock Advantage Fund’s performance has remained superior to peer group average. United Composite Islamic Fund’s year-to-date performance has also been superior to peer group average.

In case of aggressive income schemes under management, a significant amount of provisions were booked against non-performing assets in December 2011, resulting in considerable erosion in investors’ capital.

The proportion of retail money is less than 15% of the total AUMs of open-end funds. A multi-pronged strategy for enhancing investor base has been rolled out, results of which will be monitored by JCR-VIS. In recent months, there has been some growth in pension funds under management while the company is also tapping Middle East market for mobilization of investments into the funds.

The management team comprises well rounded professionals. There has been considerable stability at key management positions. The company is now working in-house on software development; once implemented, it is likely to enhance internal controls and address issues arising out of existing system related limitations.

For more information, contact:
Mr. Javed Callea
Advisor
JCR-VIS Credit Rating Company Limited
Tel: +9221 35311861 (10 lines) (Ext: 501)
Fax: +9221 35311872-3
E mail: javed.callea@jcrvis.com.pk

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