OREANDA-NEWS. Fitch Ratings has affirmed the Fund Credit Quality and Fund Volatility Ratings of CBF Church of England Deposit Fund (CBF) and COIF Charities Deposit Fund (COIF) at 'AAA'/'V1' respectively. CBF is managed by CCLA Investment Management Limited and COIF by CCLA Fund Managers Limited.

KEY RATING DRIVERS
The Fund Credit Quality Ratings reflect the funds' very high weighted average credit quality, focus on highly rated issuers (A- or higher) and short maturity profile. The Fund Volatility Ratings reflect the funds' low sensitivity to market risk factors such as interest rate and spread risks. The ratings also recognise the investment advisor's capabilities and resources.

ASSET CREDIT QUALITY
The credit quality of the funds' portfolios of assets, combined with the short maturity of assets, is consistent with a 'AAA' Fund Credit Quality Rating based on the funds' weighted average rating factors (WARF, 0.24 for CBF and 0.23 for COIF, well within Fitch's guideline WARF range of 0.0-0.4 at the AAA level). The WARF is driven by the rating distribution and short maturity profile of both funds. In terms of rating distribution, both funds are largely evenly split between securities rated 'AA-' and securities in the 'A' rating category. A sizeable proportion of assets held are short-dated, with just under 30% of portfolio assets maturing within one month for both funds (as of 29 May 2015).

The funds' investment guidelines limit the amount of risk the funds can take based on a combination of self-imposed criteria. These criteria include limits on minimum credit quality, (A-), maximum counterparty limits (maximum 10% per counterparty) and a maximum individual exposure maturity limit (of one year), among others.

PORTFOLIO SENSITIVITY TO MARKET RISKS
The funds have low exposure to market risk factors such as interest rate and spread risks.

The weighted average maturity (WAM) was 80 days for both funds as of 29 May 2015. The funds' WAMs are limited to 120 days as per their respective investment policies. Both funds invest solely in sterling instruments and neither fund is allowed to utilise leverage. Neither fund invests in floating-rate instruments.

THE TRUSTEE AND ADVISOR
The Trustee for the CBF Church of England Deposit Fund is CBF Funds Trustee Limited (CBFFT), and the Trustee for the COIF Charities Deposit Fund is HSBC Bank plc. COIF has a Board appointed under the Fund Scheme.. Both the CBFFT and the COIF Board have delegated to CCLA the investment management and administrative responsibilities for the respective funds.

COIF is classified as an Alternative Investment Fund under applicable regulation and accordingly is managed by CCLA Fund Managers Limited, an Alternative Investment Fund Managers Directive compliant wholly owned subsidiary of CCLA Investment Management Limited (CCLA). CCLA is a UK-based fund management group offering a range of fund products. CCLA is owned by The CBF Church of England Investment Fund (54.90%), The COIF Charities Investment Fund (22.88%),the Local Authorities' Mutual Investment Trust (13.72%) and CCLA Executive Directors (8.50%),. An independent operational risk, internal audit and compliance team maintains oversight of the funds' operations. As of 31 March 2015, CCLA managed GBP5.7bn of assets.

CCLA appointed HSBC Bank plc (AA-/Stable/F1+) as Depositary of COIF in 2014.

FUND PROFILES
Both funds aim to pay competitive rates of interest to reflect short-dated money market rates. The assets of the funds will be invested in eligible securities of counterparties who are regularly reviewed and annually approved by COIF's Board members and CBFFT, respectively.

The size of the CBF Church of England Deposit Fund was GBP614m and the COIF Charities Deposit Fund was GBP938m as of 29 May 2015.

RATING SENSITIVITIES
The ratings may be sensitive to material changes in the credit quality or market risk profiles of the fund. A material adverse deviation from Fitch's guidelines for any key rating driver could cause the ratings to be downgraded by Fitch. For additional information about Fitch's bond fund ratings guidelines, see the criteria referenced below.