PACRA Maintains Stability Rating of Alfalah Income & Growth Fund (Formerly: Faysal Income & Growth Fund)

Alfalah Income & Growth Fund (or the "AIGF") maintains a Medium risk profile. The prime objective of Faysal Income & Growth Fund is to provide superior long-term risk adjusted returns by investing in a diverse pool of fixed income securities, including money market instruments. In particular, the aim is to minimize interest rate risk through duration management and default risk portfolio diversification. The fund will employ prudent and disciplined investment management, and maximize the total investment return through systematic and informed security selection. The fund's asset allocation reflected 73.13% in Bank Placements and 70.87% in TFC/Sukuk avenues while -44% in Others at the end Dec’24, with the negative allocation in Others likely reflecting a provision. Concerning credit quality, the fund invested 72.29% in AA-, 70.87% in B-rated, while remaining 0.35% in A, 0.18% in AA+, 0.15% in AA, 0.14% in AAA/Govt and 0.01% in A+ rated avenues, whereas -44% in Others likely a provision; however, the 70.87% allocation to B-rated securities is in deviation to the fund’s investment policy, which typically limits such exposure to a maximum of 10%. The WAM of the Fund stood at 464 days at the end Dec’24, exposing it to moderate credit risk, while it should be noted that as announced on January 6, 2025, the management rights of this fund were transferred to Alfalah Asset Management Limited, effective January 1, 2025, with future assessments focusing on the strategies Alfalah will adopt.
Going forward, any material changes in the investment policy or the devised rating criteria for the assigned rating would have an impact on the ratings.

About the Entity
Alfalah Asset Management Limited (Formerly: Alfalah GHP Investment Management Limited) was incorporated on October 18, 2004 as an unlisted public limited company and is licensed by the Securities and Exchange Commission of Pakistan to manage open-ended mutual funds and offer investment advisory services. The Company was established as joint venture Non-Banking Finance Company by Bank Alfalah Limited and GHP Arbitrium. The Company provides a wide range of mutual funds and pension funds both in conventional and Shariah compliant category. The Company also provides investment advisory services to HNW individuals and corporate clients. The Company’s board of directors comprises eight members including the Chairman (Mr. Atif Aslam Bajwa) and the Chief Executive Officer (Mr. Khaldoon Bin Latif). The board is dominated by representatives of MAB Investments and Bank Alfalah Limited. The board has two independent and five non-executive directors. The board members possess strong profile and skills suited to the financial services industry. Assets under management of the Company stood at ~PKR 337bln at end Dec'24.