Fitch Ratings has affirmed Benchmark Liquid BeES Mutual Fund's National rating at 'AAA(ind)' and its volatility rating at 'V1+(ind)'. The ratings reflect the fund's highest standards for credit quality, its conservative investment approach and the safety of its principal, relative to other bond funds in India. Fitch has considered the fund's investment policies, management capability and commitment, risk management procedures and supporting controls in ensuring consistency with management's objectives. Portfolio monitoring reports are also submitted to Fitch on a weekly basis.
As a constant net asset value (CNAV) fund, its investment objective is to offer the highest level of protection to the principal invested so as to ensure that the NAV does not fall below the value of INR1,000.00, while providing unit holders with a high level of liquidity. To maintain the highest level of credit quality, the fund has to date invested exclusively in securities with a Fitch Short-term rating of 'F1+(ind)' or its equivalent; however the fund can invest in 'F1(ind)' or equivalent rated securities, subject to a limit of 10% of the assets under management. The fund invests in short-term money market instruments such as commercial papers, certificates of deposits, short term debentures and collateralised borrowing and lending obligations. The fund is not expected to hold securitised paper and debt denominated in foreign currency, to use derivatives or to have recourse to leverage.
The weighted average maturity (WAM) of the portfolio during the past 12 months has been on an average 22 days, with a maximum of 35 days. The WAM during the past three months has been below 30 days with securities maturing within 7 days accounting for over 40% of the NAV. The proportion of the fund's NAV accounted for by the top 10 largest unit holders has varied between 42% to 60%.
The investment manager, Benchmark Asset Management Company Pvt. Ltd, was incorporated as a Public Limited Company in October 2000, and subsequently converted to a Private Limited Company in February 2002. Benchmark's major shareholder is Niche Financial Services Pvt. Ltd., which is a RBI registered Non Banking Financial Services Company.
Note to Editors: Fitch's National fund credit ratings are assigned on a scale of 'AAA(ind)' to ' C(ind)', on a rating scale similar to that of Fitch's National Long-term credit ratings. Meanwhile, the volatility ratings are assigned on a scale of 'V1+(ind)' (least volatile) through to 'V10(ind)' (most volatile). The 'V1+(ind)' rating is assigned only to money market funds that should not experience a loss of principal value even in adverse interest rate environments. The ratings assigned to the fund are National ratings, and as such, they provide a relative measure of creditworthiness and total return stability only in comparison with other funds in India. They are therefore not internationally comparable.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.