PACRA Maintains the Stability Rating of ABL Islamic Income Fund

ABL Islamic Income Fund (“ABL IIF” or the “Fund”) is a medium-risk Islamic income scheme, with the objective to provide investors the opportunity to earn higher income over the medium to long term by investing in a diversified portfolio of money market and debt instruments permissible under Shariah principles. As of Dec’25, the Fund’s Assets Under Management (AUM) stood at PKR 1,592mln, compared to PKR 1,874mln as of Jun’25 (the last review). The reduction in fund size is primarily attributable to investor redemptions amid monetary policy easing, which led to lower yields in the money market and fixed-income space, prompting some investors to reallocate to alternative investment opportunities, while the Fund continued to maintain its Shariah-compliant portfolio. In terms of asset allocation, approximately ~63% of the portfolio was maintained in cash, ~21% in Government-guaranteed instruments, and ~11% in Sukuks, with the remaining exposure in other Shariah-compliant avenues. This allocation reflects a focus on liquidity while maintaining exposure to medium- to long-term Shariah-compliant income-generating instruments. From a credit quality perspective, the Fund maintained a strong profile, with approximately ~55% of assets in AA- rated instruments and ~29% in AAA-rated instruments, ensuring that the majority of exposures remain in high-quality instruments while achieving income generation consistent with its medium-risk mandate. As of Dec’25, the Fund’s Weighted Average Maturity (WAM) stood at 185 days, indicating moderate sensitivity to interest rate and credit risk, while allowing the Fund to capture returns across different maturities. The unit holding pattern reflects moderate concentration, with the top 10 investors accounting for ~46% of total units. Notably, ~30% of the Fund is held by Provident and Gratuity Funds, which generally provide stability to the investor base. Consequently, overall redemption risk is considered low. In terms of performance, the Fund delivered a one-year annualized return of 9.33% as of Dec’25, slightly below the benchmark return of 10.06%, reflecting its conservative positioning and focus on maintaining Shariah-compliant exposures amid a lower-yield environment.
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 rating.

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 287bln at the end of Dec'25.