Management Quality Rating of IGI Funds Limited revised

Karachi, July 26, 2012 (PPI-OT): JCR-VIS Credit Rating Company Ltd. (JCR-VIS) has revised the Management Quality Rating of IGI Funds Limited (IGI Funds) from ‘AM2-’ (AM-Two Minus) to ‘AM3+’ (AM-Three Plus). The rating remains under ‘Rating Watch – Developing’ status.

Total collective investment schemes under management have increased to six with the launch of IGI Capital Protected Fund in October 2011. IGI Money Market Fund, the largest fund under management, was the best performing fund in its category in FY12; return of IGI Aggressive Income Fund also features in the top quartile in relation to peer funds.

In case of IGI Islamic Income Fund, in terms of returns, its performance is amongst the lowest in relation to other Islamic income funds; risk profile is considered sound. Performance of IGI Income Fund has been recorded below benchmark. Relative performance ranking of IGI Stock Fund has also weakened on a timeline basis in relation to peer funds.

There has been an increase in the number of SMA client portfolios being managed by the company. These mandates are largely non-discretionary in nature. In line with the investment mandates, portfolios are largely deployed in government securities, in view of which returns are mostly aligned with benchmark interest rates.

Unit holding pattern of all funds under management features significant concentration. Development of a diversified investor base will allow the fund managers to realize the strategy envisaged for the funds over a longer term along with reducing concentration related risks.

There have been delays in development of the risk management infrastructure as envisaged earlier. Overall stand-alone infrastructure at the AMC needs to be more fully developed. JCR-VIS will also continue to track developments in relation to the sponsors’ decision to sell IGI Investment Bank Limited, along with its two wholly owned subsidiaries, including IGI Funds.

For more information, contact:
Mr. Javed Callea
Advisor
JCR-VIS Credit Rating Company Limited
Tel: +9221 35311861 (10 lines) (Ext: 501)
Fax: +9221 35311872-3
E mail: javed.callea@jcrvis.com.pk