Coronation Fixed Income Fund rated “Aa-/FV4” by Agusto & Co.
The rating expires on 30 September 2019
Agusto & Co. affirms the “Aa-” credit quality and FV4 volatility ratings assigned to the Coronation Fixed Income Fund (‘CFIF’ or ‘The Fund’). The “Aa-” credit rating reflects the Fund’s minimal exposure to downside risk arising from credit defaults, while the “FV4” volatility rating is indicative of a portfolio considered to have moderate to high sensitivity to changing market conditions.
The Fund has conservative guidelines with respect to credit risk, with an average of 83% of net assets held in Federal Government of Nigeria (FGN) Securities, which are considered to be of Aaa credit quality on our national rating scale. In addition, all investments fell within the investment grade rating category in the review period.
As at 30 June 2018, the Fund recorded a duration of 849 days or 2.33 years, within CFIF’s target duration but over 9 times the weighted average maturity of cash flows for funds we consider to have low exposure to interest rate risk. Agusto & Co considers the Manager’s investment processes to be well structured and adequate for the level of activities, supported by an experienced investment committee. However, we note the limited experience of the secondary portfolio managers in managing collective investment schemes.
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