PACRA Maintains Stability Rating of Atlas Mutual Funds

December 12, 2018 (MLN): Pakistan Credit Rating Agency has maintained stability ratings of Atlas Income Fund at ‘AA-(f)’ for long-term, with a stable outlook forecast.

The rating reflects the fund's medium exposure to interest rate volatility, moderate credit profile, and diversification across assets. At the end of Jun-18, fund's exposure was ~67% in cash, ~27% in TFCs, while ~2% in T-bills and MTS each. The unit holding pattern of the fund is concentrated with top 10 investors representing ~92% of the fund's assets (of which almost all of the investments are group's investments) which exposes the fund to a very low level of redemption pressure.

Going forward, the fund intends to increase its exposure to government securities. Material changes in the fund's asset allocation strategy, which could negatively impact the fund's credit quality and exposure to interest rate risk, remains critical for the rating.

Pakistan Credit Rating Agency has maintained stability ratings of Atlas Money Market Fund at ‘AA(f)’ for long-term, with a stable outlook forecast.

The rating reflects the fund's low-risk profile emanating from the fund's investment objective to invest in avenues rated 'AA' and above. At the end of Jun-18, the asset allocation of the fund consisted of ~99% Bank Deposits (~93% 'AAA' rated). The portfolio duration of the fund represents very low exposure towards interest rate volatility. The unit holding pattern of the fund is concentrated with top 10 investors representing ~85% of the fund's assets. Meanwhile, the group's own investment represents ~62% in total portfolio.

Going forward, the company intends to increase its exposure in T-Bills whilst the remaining assets will be invested as cash with banks.

Pakistan Credit Rating Agency has maintained stability ratings of Atlas Sovereign Fund at ‘AA(f)’ for long-term, with a stable outlook forecast.

The rating reflects the fund's strong credit profile emanating from its investment objective to invest in short-term Government Securities transactions based on quarterly average investment. At end-Jun18, fund’s exposure in banks was ~74% rated 'AAA' and ~26% in T-Bills. The fund has a duration of 3 days at the end of Jun-18. The unit holding pattern of the fund is concentrated with top 10 investors representing almost all of the portfolio. Meanwhile, the group's own investment represents ~ 50% in total portfolio.

Going forward, the company intends to increase its exposure to T-bills. The rating remains dependent on maintaining at least 50% allocation towards government securities on a monthly average basis with portfolio duration not exceeding 60 days.

Pakistan Credit Rating Agency has maintained stability ratings of Atlas Islamic Income Fund at ‘AA-(f)’ for long-term, with a stable outlook forecast.

The rating incorporates the fund's good credit quality and sound liquidity profile emanating from the fund's strategy to invest in good quality shariah compliant instruments. At end Jun-18, ~88% of the fund's net assets were invested as cash with banks, whilst ~10% were invested in sukuks rated 'AA-' and above. The fund has a well-diversified unit holding pattern, with top 10 investors representing ~65% of the fund size which exposes the fund to moderate level of redemption pressure.
Going forward, the fund intends to maintain its exposure in cash. Material changes in the fund's asset allocation strategy, which could negatively impact the fund's credit quality and exposure to interest rate risk, remains critical for the rating.

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