PACRA maintains Stability Rating of ABL Islamic Money Market Fund

The Fund operates with a low-risk profile, aiming to deliver competitive returns to its investors while prioritizing liquidity and capital preservation. To achieve this objective, the Fund invests primarily in Shariah-compliant avenues, including Islamic bank deposits, government-backed exposures, and other high-quality short-term money market instruments. At end-Jun’25, the Fund’s asset allocation was largely tilted towards cash placements (~80%) and government-guaranteed exposures (~16%), while a small proportion was invested in short-term Islamic Sukuks (~0.7%). The remaining assets were deployed in other permissible avenues. From a credit quality standpoint, the portfolio was predominantly invested in AA-rated avenues (~69%) and government securities/AAA-rated instruments (~28%). The Fund’s weighted average maturity (WAM) stood at 23 days, reflecting minimal exposure to interest rate volatility and credit risk, consistent with the Fund’s low-risk profile. The investor concentration remained on the lower side, with the top ten investors accounting for ~38% of total holdings at end-Jun’25. This level of concentration suggests manageable exposure to redemption pressures, limiting the risk of large-scale outflows. The Fund facing downward pressure due to non compliance with the assigned rating criteria throughout the period.
Going forward, the Fund is encouraged to maintain a more balanced diversification within its investment portfolio. In line with the assigned benchmarks, the Fund is expected to keep a minimum allocation of 50% in AAA-rated avenues, while limiting its exposure to AA– rated avenues to a maximum of 25%. Consistent adherence to these thresholds would support rating stability. Moreover, any significant shift in the Fund’s asset allocation strategy that could influence its credit quality and/or exposure to interest rate risk will continue to be an important consideration in future rating assessments.

About the Entity
Incorporated in 2007, ABL AMC is a wholly owned subsidiary of Allied Bank Limited (ABL). ABL operates with 1,400 plus branches including 117 Islamic banking branches, 8 Digital/ Self Service branches & 2 overseas branches. ABL AMC possesses licenses for asset management, pension management and investment advisory services. As the leading private sector asset management and investment advisory Company in Pakistan, offerings include a comprehensive range of both Conventional and Shariah Compliant investment solutions across all major asset classes. Assets under management of the Company stood at ~PKR 274bln at the end of Jul'25.