PACRA Maintains the Stability Rating of Atlas Islamic Income Fund

Atlas Islamic Income Fund ("AIIF" or "the Fund") is categorized under a medium-risk profile, with the objective of providing unit holders a stable rate of current income consistent with long-term preservation of capital in a Shariah compliant manner. The Fund operates within an Islamic finance framework, making it suitable for investors seeking competitive income returns through a diversified Shariah compliant fixed income portfolio. As of Dec'25, the Fund's Assets Under Management (AUM) stood at PKR 3,670mln, compared to PKR 4,989mln as of Jun'25 (the last review), reflecting a contraction in fund size during the review period, broadly in line with the industry trend of investor reallocation amid the prevailing monetary easing cycle. In terms of asset allocation, approximately 41% of the portfolio was invested in cash, 22% in placements with banks/DFIs, 18% in sukuks, and ~17% in GoP Ijarah Sukuks, reflecting a well-diversified Shariah compliant portfolio spanning liquidity and duration instruments, with a meaningful allocation to sovereign-backed Islamic securities providing stability to the overall asset base. From a credit quality perspective, approximately 27% of the Fund's assets were invested in Government Securities and AAA rated instruments, ~13% in AA+ rated avenues, ~40% in AA- rated instruments, and ~15% in A1+ rated instruments, with the remainder in other exposures. The credit profile is considered broadly sound. The Fund's Weighted Average Maturity (WAM) stood at 130 days as of Dec'25, reflecting moderate sensitivity to interest rate movements. This duration profile is consistent with the Fund's income-oriented strategy of capturing yield across short-to-medium tenor Shariah compliant instruments, while the meaningful cash and placement allocation provides a natural liquidity buffer and partial offset to the interest rate risk inherent in the sukuk and GoP Ijarah Sukuk exposures. Meanwhile, the unit holding pattern indicates moderate concentration, with the top 10 investors accounting for ~45% of the Fund's total holdings, of which ~20% comprise associated companies and provident funds which are typically sticky in nature, providing a degree of stability to the investor base. The overall concentration level is assessed as moderate and manageable, with the Fund's diversified and largely liquid asset allocation providing adequate comfort regarding its ability to meet potential redemption requirements swiftly. In terms of performance, the Fund reported an annualized one-year return of 10.66% as of Dec'25, against a benchmark return of 10.06%, reflecting an outperformance of approximately 60 basis points. This above-benchmark outcome is considered a commendable result for a medium-risk Shariah compliant income fund, reflecting the Fund's effective allocation across GoP Ijarah Sukuks and short-tenor placements during the review period.
Going forward, the material changes in the Fund's asset allocation strategy, which could impact the Fund's credit quality and exposure to interest rate risk, would remain critical for the rating.

About the Entity
AAML, incorporated in August 2002, is a wholly owned subsidiary of Shirazi Investments (Pvt.) Limited – the holding company of Atlas Group. Atlas Group, founded in 1962 with the establishment of Shirazi Investments, is a diversified group with having presence in manufacturing, power, financial services, and trading. The Company’s seven-member Board of Directors comprises five representatives of Atlas Group including the CEO, the other two are independent directors. Mr. Iftikhar H. Shirazi serves as the Chairman of the Board of Directors of AAML along with several other companies of the Group. The board has three committees to provide oversight on the Company’s affairs: 1) Audit Committee, 2) Human Resource & Remuneration Committee, and 3) Investment Committee. The Company had AUMs of PKR 162bln at end of Dec'25.