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Financial markets

AWT Money Market Fund Maintains Strong Credit Profile

Strategic Insights

— 1 min read

The AWT Money Market Fund has been allocated a low risk profile by The Pakistan Credit Rating Agency Limited (PACRA). As of December 2021, the fund had invested around 13.8% in bank placements rated 'AA' and above, with the majority of its investments, around 84%, in T-Bills. The fund's credit quality remained strong throughout 2021, meeting the rating criteria set by PACRA. The fund's duration was 71 days, exposing it to medium interest rate risk, while its weighted average maturity (WAM) of 71 days limited its exposure to credit risk.

Key Takeaways:

  • The AWT Money Market Fund has been allocated a low risk profile by PACRA due to its strong credit quality and investment strategy.
  • As of December 2021, the fund had allocated around 13.8% of its investments in bank placements rated 'AA' and above.
  • The majority of the fund's investments, around 84%, were in T-Bills.
  • The fund's credit quality remained strong throughout 2021, meeting the rating criteria set by PACRA.
  • The fund's duration of 71 days exposed it to medium interest rate risk, but its WAM of 71 days limited its exposure to credit risk.
  • The top 10 investors in the fund accounted for around 94.5% of its assets, resulting in high redemption pressure.
  • Going forward, the fund aims to invest in Market Treasury Bills, bank placements, and cash and bank deposits, all rated "AAA" or Government Securities.
  • The fund's risk profile will be continuously monitored in accordance with its stated investment policies.
  • Material changes in the fund's asset allocation strategy that impact its credit quality and/or exposure to interest rate risk will affect its rating.

Statistics:

  • Around 13.8% of the fund's investments were in bank placements rated 'AA' and above as of December 2021.
  • The majority of the fund's investments, around 84%, were in T-Bills as of December 2021.
  • The fund's duration was 71 days as of December 2021, exposing it to medium interest rate risk.
  • The fund's weighted average maturity (WAM) of 71 days limited its exposure to credit risk as of December 2021.
  • The top 10 investors in the fund accounted for around 94.5% of its assets as of December 2021, resulting in high redemption pressure.

Sources:

  • The Pakistan Credit Rating Agency Limited (PACRA) press release, May 09, 2022
  • "AWT Money Market Fund" press release by The Pakistan Credit Rating Agency Limited (PACRA)

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