PACRA Maintains Stability Rating of MCB Pakistan Sovereign Fund

MCB Pakistan Sovereign Fund (or the "Fund") represents a specialized fixed income solution with near-exclusive focus on Pakistan government securities, offering investors direct exposure to sovereign credit while maintaining a low-risk profile. The Fund's investment mandate prioritizes income generation through strategic allocation across Pakistan's yield curve, combining capital preservation with yield enhancement opportunities. As of December 2024, the Fund reported Assets Under Management (AUM) of PKR 27.7 billion, establishing it as one of Pakistan's largest dedicated sovereign fixed income vehicles. In terms of asset class, 55% of the net assets were allocated to Pakistan Investment Bonds (PIBs), 32% to Treasury Bills, and 5% to bank deposits, with residual investments in other approved instruments. The Fund exhibits exceptional credit quality, with approximately 92% of assets invested in Government Securities and AAA rated instruments, complemented by 4% in AA rated avenues. This near-sovereign concentration provides substantial protection against credit risk, though the portfolio remains exposed to interest rate volatility through its duration profile. With a weighted average maturity (WAM) of 949 days as of December 2024, the Fund maintains meaningful exposure to interest rate risk, partially mitigated by its 32% allocation to short-term T-Bills. The extended maturity profile reflects strategic positioning to capture Pakistan's steep yield curve, while the substantial T-Bill component provides liquidity management flexibility.
Going forward, any material changes in the investment policy and/or compliance with the rating criteria for the assigned rating would have an impact on the ratings.

About the Entity
MCB Investment Management Limited (MCBIM) is a public listed company regulated by the Securities and Exchange Commission of Pakistan (SECP). It holds licenses for asset management, investment advisory, and pension fund management, catering to both Conventional and Shariah investment solutions. As of December 2024, MCBIM manages a diversified portfolio, including 26 Open-End Mutual Funds and 4 Voluntary Pension Schemes, while also maintaining a leading position in Separately Managed Accounts (SMA) and investment advisory services. MCBIM’s major shareholders include MCB Bank Limited (~81.42%), Adamjee Insurance Company Limited (~7.59%), and the general public (~9.28%). Mr. Khawaja Khalil Shah serves as the Chief Executive Officer of the company. The Board comprises a balanced composition of 4 Non-Executive Directors and 3 Independent Directors, ensuring robust governance, objective decision-making, and alignment with regulatory best practices. The Company’s assets under management (AUM) have grown significantly, reaching approximately PKR 588 Billion as of December 2024, reflecting its strong market presence and consistent growth in Pakistan’s asset management industry.