What will the Askari Income Fund invest in?
Term Finance Certificates (TFC’s): A debt instrument issued by various financial and non-financial entities in Pakistan, usually with a fixed term to maturity. The rating of the issuing entity is monitored and published in Pakistan by JCR-VIS and PACRA, which have come to be the leading rating agencies in the country. Most TFCs have yields linked to the Karachi 6 month interbank offered rate (KIBOR), the rate at which top tier banks are willing to lend money to each other. Some TFC’s are linked to other rates such as the base rate published by the State Bank of Pakistan from time to time. A feature of some TFC’s is that they are sometimes issued with a “Cap” and/or “Floor”, which essentially means that their yield cannot go higher than the “cap” rate or lower than the “floor” rate. Since TFC’s with caps and/or floors are hybrid instruments, their price behavior is a mix between that of a pure floating rate TFC (floater), and that of a corporate bond. TFC price behavior tends to emulate
