Muhammad Azmat Shaheen
PACRA Assigns Stability Rating to MCB Pakistan Fixed Return Fund
|Rating Type||Stability Rating|
MCB Pakistan Fixed Return Fund (the ‘Fund’) is a very low risk-profile open ended fund. The duration of the Fund is perpetual; however, allocation plan(s) launched by the Management Company (MCBAH) under this Fund may be perpetual or may have fixed maturity. The objective of the Fund is to provide an attractive fixed return at maturity of the Allocation Plans under the Fund, by investing in Fixed Income Securities. Since the Fund is not directly offering its units to the investor rather offering shall only be made through allocation Plans launched from time to time under the umbrella of this Fund.
Currently, MCB Pakistan Fixed Return Plan II and Plan VII are launched under the umbrella of the Fund. Both plans, in line with their Investment Objectives, will invest in the authorized investment avenues. The Management Company shall ensure the fixed return is delivered to the investors. The Fixed return shall be valid only for the investors who remain invested till the maturity of the pertinent plan. Investment avenues for the plans are government securities, cash in banks, money market placements, deposits, certificate of deposits, certificate of musharakas and term deposit receipts.
MCB Pakistan Fixed Return Plan II: The Fund's Plan-II is in compliance with the authorized investment policy. At Dec'22, the Plan had placed ~100% of its assets in 6months T-bills. The weighted average maturity and the duration of the Plan stood at 103 days, however, since the investments are in Govt. Securities hence, the credit risk is at a manageable level.
MCB Pakistan Fixed Return Plan VII: The Fund's Plan-VII is in compliance with the authorized investment policy. At Dec'22, the Plan had placed ~100% of its assets in 12month T-bills. The weighted average maturity and the duration of the Plan stood at 301 days, however, since the investments are in Govt. Securities hence, the credit risk is at a manageable level.
The top ten investor's concentration in both plans remained above 80% representing a high level of redemption pressure. Since the plan is fixed maturity plan hence, the redemption pressure is on lower side.
Going forward, the Fund will invest in accordance with its authorized investment policy and maintain its exposure in authorized instruments, however, the allocations need to be diversified appropriately. Material changes in the Fund's asset allocation strategy, impacting its credit quality and/or exposure to interest rate risk, would affect the rating. Furthermore, compliance with the assigned rating criteria on the Fund level would remain imperative.
MCB-Arif Habib Limited Savings and Investments Limited (MCB-AH or the "Company") is a Public Listed Company. 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 eighteen open-end funds and two voluntary pension schemes. 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. The AUMs (CIS & VPS) of MCB-AH increased to PKR 134.2bln as of Nov'22 (Jun'22: PKR 122.3bln).