The rating agency Fitch has downgraded LIC Liquid Fund's credit rating to 'AA' from 'AA+’.
“As of 30 November 2008, 33 per cent of the portfolio was invested in assets rated 'F1+'/'AAA' or equivalent, while the minimum credit rating of securities held was 'A+' or equivalent” Fitch said.
It said that the downgrade of LIC Liquid Fund's rating reflects the deterioration in the credit quality of the fund's portfolio.
Fitch said that the portfolio management team intends to at least maintain the fund's credit quality.
"The fund is relatively diversified across industry sectors but exhibits some concentration in 'F1' rated securities (or equivalent)" the agency added.