PACRA Upgrades the Stability Rating of MCB Pakistan Fixed Return Fund

MCB Pakistan Fixed Return Fund ('MCB PFRF' or the ‘Fund’) is a moderate risk-profile Fund. The duration of the Fund is perpetual; however, allocation plan(s) launched by MCBIM 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 by investing in Fixed Income Securities. 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 XVI, XVII, XVIII, and XIX are under the umbrella of the Fund. The plans will invest in authorized avenues to meet investment objectives, with the Management Company ensuring promised returns valid for investors staying invested until plan maturity. Investment avenues for the plans are Government securities, cash, money market placements, certificates of deposits and musharakas, and TDRs.
The AUM's of the Fund as of end Sep'24 was PKR 14,497mln. The Fund had strong credit quality with ~100% of placements in AAA rated avenues at the end of Sep’24. At the end of Sep’24, the Fund had allocated ~99.9% in T-Bills. The WAM of the Fund was 55 days at the end of Sep'24, representing very low exposure to credit rate risk. The top 10 investors' concentration of the Fund, at the period end Sep'24 was ~87.38% exposing the Fund to very high level of redemption pressure. Redemption pressure is addressed through maintenance of sufficient liquidity. The rating upgrade is driven by management's commitment to executing the existing allocation strategy with consistency.
Going forward, material changes in the Fund's asset allocation strategy, which could impact the Fund's credit quality and exposure to interest rate risk, would remain critical for the rating.

About the Entity
MCB Investment Management Limited (MCBIM or the "Company") is a Public Listed Company, regulated by the SECP. MCBIM holds licenses for Asset Management, Investment Advisory, and Pension Fund Management. MCBIM caters to both conventional and Shariah-compliant clientele and is currently managing a diverse product slate of twenty five open-end funds and four voluntary pension schemes. MCBIM is also managing one of the largest AUMs under the SMA segment and holds a significant position in the investment advisory domain.
The major shareholders of MCBIM are MCB Bank Limited ~81.42%, and Adamjee Insurance Company Limited ~7.59%. The general public holds the remaining ~11% of the shares. Mr. Khawaja Khalil Shah is the CEO of the company. There are four non-executive directors, three directors are independent and one executive director (CEO). The AUMs of MCBIM stood at PKR 276,814bln at end-Sep'24.