Lahore: The Pakistan Credit Rating Agency (PACRA) has maintained the stability rating of the Lakson Money Market Fund (LMMF) at ‘AA (f)’ (Double A – fund rating), an open-end money market fund. The fund’s rating denotes a very strong capacity to manage relative stability in returns and very low exposure to risks.
The LMMF primarily invests in treasury bills, money market placements, and deposits with scheduled banks with the objective of providing stable and competitive returns by constructing a highly liquid portfolio. The rating reflects very strong credit quality of the fund’s assets and a strong liquidity profile. Moreover, the rating incorporates fund’s very low exposure to interest rate volatility.
The sound profile of the fund largely emanates from fund’s investment in short term government securities, making up more than half of the fund’s net assets. The balance of the fund’s assets is invested in a combination of money market instruments and scheduled banks with a minimum entity/instrument rating of ‘AA’. However, the fund has high concentration in unit holding pattern compared to peers, making it vulnerable to redemption pressure, though significant holding by group companies mitigate the risk, to a large extent. The main factor affecting the rating of fund could be significant change in asset mix in favour of non-government securities, increasing the credit and liquidity risks.
For more information, contact:
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town, Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425