Q&A WITH ALY OSMAN

Head of Product Development, Risk Management and Compliance
UBL Fund Managers Ltd.

Updated June 20, 2009

Give a brief introduction of the new Money Market Fund that has been launched by UBL Funds?

UBL Liquidity Plus Fund (ULPF), an open-ended Money Market Scheme, is the 6th Open-Ended Fund launched by UBL Fund Managers and a 2nd product offering of UBL Fund for the year 2009.

The investment objective of ULPF is to provide its unit-holders competitive returns from a portfolio of low risk short duration assets while maintaining high liquidity.

UBL Funds takes pride in offering innovative solutions for its customers and continually coming up with interesting new features that meet customer's needs. Examples include "profit lock-in feature" introduced in UPPP-II and "same day redemption feature" in ULPF.

What is the philosophy and rational behind launching this new Money Market Fund?

UBL Fund Managers core business concept stems from the need to offer value added products and services to its customers.

Due to recent market turndown, investors' needs have dramatically shifted more towards capital preservation, safe and highly liquidity avenues, relatively short term investments, and a need for a fund with no exposure to TFC, CFS, Spreads and other risky assets.

ULPF investment concept is based on these shifting investment preferences of investors. Thus, it is assuring to provide investors customized investment solutions.

What is the target market of this fund?

Due to its short duration portfolio of assets, ULPF is suitable for all kind of investors especially Corporate, Banks, DFIs, Endowment funds, charitable institutions, NGOs etc. and individual retail clients.

How is this fund different from any other money market fund?

One of the most differentiating factors in ULPF in comparison to other money market funds is a 'Same Day Redemption' feature - introduced for the first time in Pakistan that would provide investors access to their money in the shortest possible time.

Other key features include:

Capital Preservation

Minimum/Low Risk (including Market Risk, Credit Risk & Liquidity Risk)

Tax-Free returns

No Sales Load (On Entry and Exit)

The investment portfolio of ULPF will comprise of only High-Grade short term money market instruments.

Some of the key features of ULPF investment portfolio in comparison to Fixed Income Fund are as follows:

UBL LIQUIDITY PLUS FUND (ULPF) FIXED INCOME FUNDS
No direct/indirect exposure to equities, i.e. no exposure in equities, CFS*, spread transactions. Etc; No direct equity exposure, but exposure to CFS* and Spreads shall not exceed 40% of net assets.
No exposure in TFC Can have an exposure in TFC
Rating of any NBFC and Modaraba with which funds are placed shall not be lower than AAA (Triple AAA) Rating of any NBFC and Modaraba with which funds are placed shall not be lower than investment grade (Triple BBB)
Rating of any bank and DFI with which funds are placed should not be lower than AA (Double AA) Rating of any bank and DFI with which funds are placed should not be lower than investment grade (Triple BBB)
Rating of any security in the portfolio shall not be lower than AA (Double AA) Rating of any security in the portfolio shall not be lower than investment grade (Triple BBB)
Time to maturity of any security shall not exceed six months No restriction regarding time to maturity of any single asset in the portfolio
Weighted average time to maturity of the net assets shall not exceed 90 days Weighted average time to maturity of the net assets shall not exceed 4 years (except federal government securities)

*CFS has recently been discontinued.