The FINANCIAL — Fitch Ratings has on January 14 assigned Investec Money Market Fund a Fund Credit rating of AAA(zaf) and a Volatility rating of V1(zaf). The fund, launched in May 1997, is actively managed by Investec Asset Management (Pty) Limited (IAM).
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The ratings reflect the funds high average credit quality and conservative investment practices, notably with regard to maturities of underlying securities.
The ratings have been assigned on the basis of Fitchs analysis, which included a review of the portfolio of assets and the funds investment guidelines and governing documents, complemented by meetings with portfolio managers and credit analysts.
The fund has a maximum weighted average maturity (WAM) of 90 days; all investments in the fund have a residual maturity less than 365 days. Assets are composed entirely of highly rated (F1(zaf)/F1+(zaf) or equivalent) short-term securities such as negotiable certificates of deposit (NCDs) issued by South African banks, commercial paper (including asset-backed commercial paper), promissory notes and fixed deposits. At the end of December 2007, over 90% of assets were rated F1+(zaf) or equivalent.
Fitch will undertake periodic surveillance of the portfolios holdings, credit quality and transactions, as well as the approved list of counterparties, based on information provided by IAM and the funds custodian (FirstRand Bank).
The Investec Money Market Fund is regulated by the Financial Services Board (FSB) and Collective Investment Scheme Control Act (CISCA).
At end-September 2007, IAM assets under management totalled ZAR442bn, of which approximately ZAR47bn were in South African money market funds.
Fitch Fund Credit ratings are an assessment of the overall credit quality of a funds portfolio. The ratings, which map to the same scale as National Long-term credit ratings, are based on an evaluation of several factors, including the credit quality and diversification of assets in the portfolio, management strength and operational capabilities.
Fitch Fund Volatility ratings are expressed on a scale of V1+(zaf) (least volatile) through V10(zaf) (most volatile) on a national scale. Funds rated V1+(zaf) are considered to have very low market risk. Total returns exhibit relative stability, performing consistently across a broad range of interest rate scenarios and changing market conditions.
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