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Financial markets

Atlas Islamic Money Market Fund Maintains Low-Risk Profile with Strong Credit Quality

Strategic Insights

— 1 min read

The Atlas Islamic Money Market Fund reflects a low-risk profile, with a strong credit quality rooted in its asset composition. At the end of December 2021, the fund had allocated approximately 60% of its net assets to a bank rated 'AA', while 13% was invested in Islamic Commercial Papers (ICPs). This investment strategy limits exposure to interest rate risk, with a duration of 23 days. The weighted average maturity (WAM) of the fund was also 23 days, further minimizing credit risk.

Key Takeaways:

  • The Atlas Islamic Money Market Fund has allocated ~60% of its net assets to a bank rated 'AA', reducing interest rate risk.
  • Approximately 13% of the fund's assets are invested in Islamic Commercial Papers (ICPs), maintaining credit quality.
  • The top 10 investors' concentration of the fund was ~86% at the end of December 2021, with ~49% being related parties.
  • The fund has a duration of 23 days and a WAM of 23 days, minimizing exposure to interest rate and credit risks.
  • The investment in bank deposits (60%) provides a cushion against redemption pressure.
  • The Fund is diversifying its allocation by placing funds in Islamic windows of AAA and AA+ rated banks to strengthen credit quality.
  • Material changes in the Fund's asset allocation strategy could negatively impact its credit quality and exposure to interest rate risk.

Statistics:

  • 60% of the fund's net assets were allocated to a bank rated 'AA' (December 2021).
  • 13% of the fund's assets were invested in Islamic Commercial Papers (ICPs) (December 2021).
  • The top 10 investors' concentration of the fund was ~86% (December 2021).
  • ~49% of the top 10 investors in the fund were related parties (December 2021).
  • The Fund's duration was 23 days (December 2021).
  • The WAM of the fund was 23 days (December 2021).
  • 60% of the fund's investments were in bank deposits (December 2021).

Sources:

  • The Pakistan Credit Rating Agency Limited (PACRA) - Atlas Islamic Money Market Fund press release (no date mentioned).

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