PACRA Maintains Stability Rating of ABL Islamic Sovereign Fund

ABL Islamic Sovereign Fund ("ABL-ISF" or "the Fund") is categorized under a medium-risk profile, with the objective of providing competitive returns through maximum possible preservation of capital by investing in Shariah compliant government securities, deposits, short-term sukuk, commercial paper, and other Shariah compliant money market instruments. As of Dec'25, the Fund's Assets Under Management (AUM) stood at PKR 770mln, compared to PKR 2,511mln as of the last review, reflecting a contraction in fund size during the review period, largely in line with the broader industry trend of investor reallocation amid the prevailing monetary easing cycle.. In terms of asset allocation, approximately ~90% of the portfolio was invested in government guaranteed instruments, with ~8% in cash and the remainder in other eligible instruments, reflecting a near-exclusively sovereign-oriented portfolio consistent with the Fund's Islamic sovereign income mandate. From a credit quality perspective, ~92% of the Fund's assets were invested in AAA rated and government securities, with ~6% allocated to AA- rated instruments and the remainder in other exposures. The overall credit profile remains strong, with the bulk of exposures concentrated in the highest quality instruments, commensurate with the Fund's medium-risk mandate. The Fund's Weighted Average Maturity (WAM) stood at 705 days as of Dec'25, reflecting high sensitivity to interest rate movements. Meanwhile, the unit holding pattern reflects a high degree of concentration, with the top 10 investors accounting for ~79% of the Fund's total holdings, of which ~40% comprise associated companies and provident funds which are typically sticky in nature, providing a relatively stable investor base. However, the risk is mitigated by the Fund's dominant allocation to government guaranteed instruments, which provide a highly liquid and readily realisable asset base to meet potential redemption requirements. In terms of performance, the Fund reported an annualized year-to-date return of 9.45% as of Dec'25, against a benchmark return of 9.73% and a peer average of 10.86%, reflecting an underperformance of 28 basis points relative to the benchmark and a more pronounced gap of 141 basis points against the peer group.
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
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.