Bangkok--22 Oct--Fitch Ratings Fitch Ratings has today affirmed the National Fund Credit Rating for AYF Cash Management Fund (AYFCASH or the fund, formerly known as AJF Cash Management Fund) managed by Ayudhya Fund Management Company Limited (AYF), at 'AAA(tha)', and its National Fund Volatility Rating at 'V1(tha)'. A National Fund Credit Rating of 'AAA(tha)' indicates that the fund has the highest credit quality standard for a bond fund in Thailand in terms of its portfolio assets, diversification, investment management and operational capabilities. Bond funds rated 'V1(tha)' are considered to have low market risk relative to other bond funds in Thailand, demonstrating relative stability in total returns over the short- to long-term holding periods. AYFCASH is an open-ended, short-term fixed-income fund, mainly investing in short-term government debt instruments, bank deposits and highly rated short-term fixed-income instruments. Under its investment restrictions and guidelines (IRGs), the fund must invest at least 70% of the fund's net asset value (NAV) in short-term government securities or in issues guaranteed by the government. The fund is also allowed to invest a maximum of 15% in corporate issues and a maximum of 15% in financial institution papers. In terms of credit quality, at least 85% of the fund's NAVs must be invested in 'AAA(tha)'-rated securities, and the remaining in securities with a minimum rating of 'AA-(tha)' (AA minus(tha)). Each security must have a maturity of less than six months, and the portfolio duration is targeted to be below 0.25 years. Fitch notes that the fund has been able to maintain the portfolio quality as determined in the IRGs. The credit quality of the fund is strong due to its high investment in 'AAA(tha)'-rated assets. The market risk of the portfolio remains low because the majority of the assets are short-term liquid assets with a historical average portfolio maturity of below 40 days. At the end of September 2007, the fund held 99% of its NAV in 'AAA(tha)' assets, while the portfolio maturity was 34 days. Investor concentration has also improved during the last 12 months. The top-five largest unit holders accounted for approximately 20% of the fund's NAV, a significant decline from 40% in September 2006. The fund's management team appears experienced and capable, although the industry is generally subjected to turnover risk of key staff. Its operational controls are adequate to fulfill the standards of required investment practices. The asset manager, AYF, is a Thailand-based asset management company, 100% owned by Bank of Ayudhya. At end-September 2007, AYF had THB44.1 billion in assets under management, more than 90% of which were mutual funds, and the remaining private funds. Fund credit rating reflects the average credit quality of the fund's overall portfolio and its investment policies. The volatility rating reflects the risk-adjusted duration of the fund's investments, which incorporates interest rate, credit spread, liquidity, derivative and other applicable risk factors. Fitch notes that Thailand's bond funds generally have short durations and therefore narrowed volatility definitions are required to provide greater differential between rated funds. TISCO Asset Management Company Limited and Kasikorn Asset Management Company Limited each hold 10% of the shares in Fitch Ratings (Thailand) Limited. No shareholder, other than Fitch Ratings Limited of the UK, is involved in the day-to-day operation of, or credit rating reviews undertaken by, Fitch Ratings (Thailand) Limited. A copy of the report will be available on the agency's web site, www.fitchratings.com and Fitch's Asian website www.fitchratingsasia.com. Contacts: Napachak Phasukavanich, Lertchai Korcharoenrattanakul, Vincent Milton, +662 655 4755.