The Pakistan Credit Rating Agency Limited
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Muhammad Zain Ayaz

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PACRA Maintains Stability Rating of AWT Income Fund

Rating Type Stability Rating
(08-Apr-22 )
(08-Oct-21 )
Action Maintain Maintain
Long Term A+(f) A+(f)
Short Term - -
Outlook Stable Stable
Rating Watch - -

The rating incorporates the AWT Income Fund's (or the "Fund") adequate credit quality and liquidity profile, emanating from the Fund's current portfolio mix. At end Dec'21, the Fund was invested ~93% in banks, ~7% in TFCs/Sukuks. At end Dec'21, the credit quality of the Fund is sound, 36% of the assets were invested in AAA rated, 10% in AA+ while 47% were invested in AA- and A+ rated avenues. The duration of the investments was 10 days, which lowers the risk to interest rate volatility. While the WAM of the Fund was 30 days which is also limiting the exposure to credit risk. The unit holding pattern of the fund is low concentrated with top 10 investors representing ~44% of the Fund's assets, which exposes the fund to moderate level of redemption pressure.
Going forward, the Fund intends to maintain its exposure in T-bills and PIBs. The remaining assets of the Fund will be invested in cash placements. Material changes in the Fund's asset allocation strategy, which could negatively impact the Fund's credit quality and exposure to interest rate risk, remain critical for the rating.

About the Entity
AWT Investments Limited is a public unlisted company, incorporated in 2011. It is a Non-Banking Finance Company, licensed by the Securities and Exchange Commission of Pakistan to manage open and closed-end funds and Investment Advisory Services. The Company is a wholly-owned subsidiary of Army Welfare Trust. The Board of Directors of the Company comprises five members. The CEO of the Company Mr. Salman Haider has recently resigned. Mr. Sajjad Anwar has joined as CEO of the Company in Mar'22. Mr. Anwar is CFA charter holder and has over 21 years of experience that involves Equity Research, Portfolio Management, Investment Advisory, Risk Management, and Finance & Accounts. For the last 15 years, he has been working in the Fund Management Industry. Before becoming CEO at AWTIL, he was performing the role of Chief Investment Officer at NBP Funds.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.