ICRA Lanka assigns [SL]Amfs to SENFIN Dynamic Income Fund
|Instrument||Rated Amount (LKR Mn)||Rating Action|
|SENFIN Dynamic Income Fund||N/A||[SL]Amfs; assigned|
Rationale and Key Rating Drivers
ICRA Lanka Limited has assigned a credit risk rating of [SL]Amfs (pronounced as Sri Lanka A mutual fund scheme) to the SENFIN Dynamic Income Fund (SENFIN Dynamic Fund or “Fund”) which is managed by SENFIN Asset Management (Pvt) Ltd (the asset management company). Schemes with this rating are considered to have adequate degree of safety regarding timely receipt of payments from the investments that they have made. The assigned rating is based on the SENFIN Dynamic Fund’s portfolio with the credit score being comfortable at the assigned rating level.
The rating indicates ICRA Lanka’s opinion on the credit quality of the portfolio held by the fund. It does not indicate SENFIN Dynamic Fund’s willingness or ability to make timely payments to the fund’s investors. The rating should not be construed as an indication of expected returns, prospective performance of the mutual fund scheme, net asset value (NAV) or volatility in its returns.
ICRA Lanka’s mutual fund rating methodology is based on evaluating the inherent credit quality of the fund’s portfolio. As a measure of the credit quality of a debt fund’s assets, ICRA Lanka uses the concept of “credit scores”. These scores are based on ICRA Lanka’s estimates of the credit risk associated with each exposure of the portfolio taking into account its maturity. To quantify the credit risk scores, ICRA Lanka uses its database of historical default rates for various rating categories and maturity buckets. The credit risk ratings incorporate ICRA Lanka’s assessment of a debt fund’s published investment objectives and policies, its management characteristics, and the creditworthiness of its investment portfolio. ICRA Lanka reviews relevant fund information on an ongoing basis to support its published rating opinions. If the portfolio credit score meets the benchmark of the assigned rating during the review, the rating is retained. In an event that the benchmark credit score is breached, ICRA Lanka gives a month’s time to the debt fund manager to bring the portfolio credit score within the benchmark credit score. If the debt fund manager is able to reduce the portfolio credit score within the benchmark credit score, the rating is retained. If the portfolio still continues to breach the benchmark credit score, the rating is revised to reflect the change in credit quality.
Outlook: Not applicable
Liquidity position: Not applicable
|Applicable Rating Methodologies||ICRA Lanka’s Mutual Fund Credit Risk Rating Methodology|
|Parent/Group Support||Not applicable|
|Consolidation / Standalone||Not applicable|
About the Company
SENFIN Asset Management (Pvt) Ltd
SENFIN Asset Management (Pvt) Ltd was incorporated in 2010, and operates as a Unit Trust Fund Manager which is licensed and regulated by the Securities and Exchange Commission of Sri Lanka (SEC). SENFIN Asset Management (Pvt) Ltd had total assets under management (AUM) of LKR 3.8 Bn as in September 2021. SENFIN Asset Management (Pvt) Ltd acts as the investment manager to the SENFIN Fund.
SENFIN Dynamic Income Fund
SENFIN Dynamic Income Fund is a fixed income fund approved by the Securities and Exchange Commission of Sri Lanka (SEC). The Fund was launched in February 2021. The fund invests in Treasury securities, corporate bonds, debentures, commercial papers, asset backed trust certificates, repurchase agreements of both Government securities and Corporate Securities, Deposits in LCBs, LSBs or NBFIs, Other short-term and long-term fixed income securities issued by financial and non-financial entities, money market unit trust funds licensed by SEC, SL-REITS licensed by SEC, other fixed income investments approved by the Trustee and SEC from time to time. The overall objective of the Fund is to maximize returns through the active management of a portfolio of short- term and long-term fixed income securities. A secondary objective is to provide an annual dividend to unitholders. The Fund’s assets under management stood at ~ LKR 271 Mn as on October 31, 2021 with an average residual maturity of around 13 months.
Key financial indicators: Not applicable
Any other information: None
Rating history for the last three years:
|Sanduni Kankanamalage |
Subsidiary of ICRA Limited
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