Muhammad Zain Ayaz
PACRA Maintains Stability Rating of Alfalah GHP Cash Fund
|Rating Type||Stability Rating|
The rating reflects strong strength of the Funds credit and interest rate risk profile. The Funds good credit quality and sound liquidity profile emanates primarily from its mandate to invest in government securities and other low duration avenues such as bank placements. As per the investment policy, the weighted average maturity of Fund shall not exceed 90 days and time to maturity of any individual asset is capped at six months. while the duration of the Fund remained 1 day, at end Jun'21. At end Jun'21, ~99.9% of funds assets were allocated to a single bank rated 'AAA', this gives rise to concentration risk. Funds unit holding pattern is highly concentrated with top 10 investors representing ~90% of the net assets, which exposes the fund to high level of redemption pressure.
Going forward, the fund intends to maintain the current allocation strategy. Material changes in the funds asset allocation strategy, impacting its credit quality and/or exposure to interest rate risk, would affect the rating.
Alfalah GHP Investment Management Limited was incorporated on October 18, 2004 as an unlisted public limited company and is licensed by the Securities and Exchange Commission of Pakistan to manage open-ended mutual funds and offer investment advisory services. The Company was established as joint venture Non-Banking Finance Company by Bank Alfalah Limited and GHP Arbitrium. The Company provides a wide range of mutual funds and pension funds both in conventional and Shariah compliant category. The Company also provides investment advisory services to HNW individuals and corporate clients.
The Company’s board of directors comprises eight members including the Chairman and the Chief Executive Officer. The board is dominated by representatives of MAB Investments and Bank Alfalah Limited. The board has two independent and five non-executive directors. The board members possess strong profile and skills suited to the financial services industry. Assets under management of the Company stood at ~PKR 54,965mln at end Jun’21 and are spread across fifteen open-end mutual funds and two voluntary pension schemes.