Press Release

JCR-VIS Harmonizes Fund Stability Rating of UBL Savings Income Fund

Karachi, March 29, 2012: JCR-VIS Credit Rating Company Limited has harmonized the Fund Stability Rating (FSR) of UBL Savings Income Fund (USIF) at ‘AA-(f)’ (Double A Minus (f)).

USIF is an open-end income fund, having objective to invest in fixed income instruments. In slightly over a year, the fund size of USIF has increased to Rs. 5b by end-December 2011. The target asset allocation of the fund envisages 45% exposure to government paper, 5% in commercial papers and the remaining in mostly money market instruments. While margin financing and spread transactions are allowable investment avenues, the fund does not plan to take any exposure in this avenue over the foreseeable horizon. At end-December 2011, more than three-fourths of the assets were deployed in government securities. Overall credit risk of the portfolio is considered low.

Potential exposure to interest rate risk was higher earlier, as the fund targeted duration of up to 2 years. In a recent policy change, this has been revised downwards to 180 days. Weighted average time to maturity of the portfolio was 0.82 years at end December 2011; this has been reduced to 0.32 years by end-February 2012.

The fund’s return came under significant pressure in November and December 2011, though overall return for 1H12 has been in excess of the benchmark. Year-to-date return of the fund has been in the top quartile in relation to peer funds. Given the nature of the fund’s assets, and revision in policy with respect to duration, greater month-on-month stability in the fund’s returns may be expected, going forward.

For further information on this rating announcement, please contact Mr. Javed Callea (Ext: 501) or Ms. Sobia Maqbool, CFA (Ext: 506) at 35311861-70 or fax to 35311872.

Jamal Abbas Zaidi
Deputy CEO

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited VIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.VIS, the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report.VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2012 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.

JCR-VIS Credit Rating Company Limited