PACRA Assigns Initial Stability Rating to AKD Islamic Income Fund
|Rating Type||Stability Rating|
The objective of AKD Islamic Income Fund (AKDISIF) is to provide investors with an investment vehicle that strives to enhance capital coupled with regular halal income by investing in Shariah compliant income investments
The rating reflects the fund's moderate credit risk profile emanating from its investment strategy to invest in high credit quality investment avenues with sound liquidity. Currently, the fund's exposure with sukuks is ~15%, while~ 62% of the fund's assets are exposed towards banking deposits with banks rated 'A-' and above. Exposure with 'AAA' rated banks was ~6% whereas with 'A+' and 'AA' rated banks exposure was ~62% and ~9% respectively at end-Jun 18. The unit holding pattern of the fund is concentrated with top 10 investors representing ~ 81% of the fund's total asset which exposes the fund to a high level of redemption risk.
Going forward, the fund intends to maintain its allocation towards bank deposits. The remaining asset will be invested in Shariah-compliant good quality debt instruments. Material changes in the fund's asset allocation strategy, which could negatively impact the fund's credit quality and exposure to interest rate risk, remains critical for the rating.
AKD Investment Management Limited commenced its operations in September 2004. The company is registered as an Asset Management Company under the Non-Banking Finance Companies Rules, 2003. The company is sponsored by Aqeel Karim Dhedhi Securities (Pvt) Limited (99.97% ownership). Aqeel Karim Dhedhi Securities (Pvt) Limited is majority owned by Mr. Aqeel Karim Dhedhi, Chairman of the AKD Group, a renowned figure in Pakistan's capital market.
The Board of Directors of the company comprise seven members, including the CEO Mr. Imran Motiwala, who has been serving as the Chief Executive Officer of AKD Investment Management Limited since 2009. The company is currently managing six open-end funds and one closed-end fund with assets under management of ~PKR 5.6 billion at end October-18.