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Atlas Islamic Money Market Fund Maintains High Credit Risk Profile, Diversifies Investments

Strategic Insights

— 1 min read

The Pakistan Credit Rating Agency Limited (PACRA) has evaluated the Atlas Islamic Money Market Fund, managed by Atlas Asset Management Limited. Launched in January 2021, the fund aims to strengthen its position in the Islamic money market category by investing in strong credit quality avenues with sound liquidity. The fund's high credit risk profile is driven by its investment policy, which strictly prohibits investments in below AA-rated avenues, and its current 100% investment in a single bank rated 'AA'. The fund's weighted average maturity is 1 day, and its unit holding pattern is highly concentrated, with the top 10 investors representing 100% of the total fund size.

Key Takeaways:

  • The fund maintains a high credit risk profile due to its investment policy in strong credit quality avenues with sound liquidity.
  • The fund's investment policy strictly prohibits investments in below AA-rated avenues.
  • The fund's current weighted average maturity is 1 day, indicating low market exposure.
  • The unit holding pattern is highly concentrated, with the top 10 investors representing 100% of the total fund size.
  • The fund is in the process of diversifying its fund allocation by placing funds assets in Islamic window of AAA and AA+ rated banks.
  • The strategy represents high liquidity and low risk profile, boding well for the rating.
  • Any breach of investment policy is considered negative.
  • The offering document restricts the fund to liquid and low-risk profile avenues, limiting the build-up of redemption pressure.

Statistics:

  • 100% of the fund's assets were invested in a single bank rated 'AA' as of January 2021.
  • The fund's weighted average maturity is 1 day.
  • The top 10 investors represent 100% of the total fund size.
  • The fund's investment policy prohibits investments in below AA-rated avenues, limiting the potential for portfolio diversification.
  • 100% of the fund's assets are invested in Islamic window of AAA and AA+ rated banks.

Sources:

  • The Pakistan Credit Rating Agency Limited (PACRA)
  • Atlas Asset Management Limited
  • "Atlas Islamic Money Market Fund" press release, PACRA, April 22, 2021

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