Pakistan Credit Rating Agency Limited assigns stability rating to Faysal Savings Growth Fund

Lahore, August 20, 2015 (PPI-OT): The Pakistan Credit Rating Agency (PACRA) has assigned the stability rating of ‘AA-(f)’ (Double A minus; fund rating) to Faysal Savings Growth Fund (FSGF), an open-end income fund. The fund’s rating denotes a very strong capacity to manage relative stability in returns and very low exposure to risks.

The investment objective of the fund is to earn competitive returns by investing mainly in a mix of short term to long term government securities and other debt instruments, having investment grade credit rating. The rating reflects the fund’s strong credit quality and sound liquidity profile, emanating from the fund’s current portfolio composition. At end-Jun’15, the portfolio is primarily invested in government securities (PIBs: 23%, Tbills: 5%). The remaining assets are invested in daily cash balances with good quality banks (48%) and high rated Financial Institutions’ TFCs (5%).

A sizeable portion is deployed in margin trading system (19%) which, due to its self liquidating nature, possesses less risk over a short tenure. As per the Investment Philosophy to be followed from now onwards, the fund would maintain at least 25% allocation towards government securities, upto 25% exposure in margin trading system, exposure in TFCs / Sukuks would be upto 10% restricted to ‘AA-‘ and above instruments; the remaining balance would constitute placements with high rated (‘AA-‘ and above) banks, wherein, deposits with below ‘AA-‘ rated banks would not exceed 1%.

Currently, there are certain deviations from this intended risk character that would be adjusted shortly. The unit holding pattern of the fund is moderately concentrated with the top10 investors representing ~52% of the fund’s assets. Going forward, adherence to the stated Investment Philosophy of the fund remains crucial for the rating. PACRA would monitor performance against agreed parameters on monthly average basis.

For more information, contact:
Hammad Rashid
Analyst
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425
Email: hammad.rashid@pacra.com
Web: www.pacra.com