PACRA Maintains the Stability Rating of Atlas Sovereign Fund

Atlas Sovereign Fund ("ASF" or "the Fund") is categorized under a medium-risk profile, with the objective of generating competitive returns through investment in Government Securities and debt instruments. As of Dec'25, the Fund's Assets Under Management (AUM) stood at PKR 2,675mln, compared to PKR 2,754mln as of Jun'25 (the last review), reflecting a marginal contraction in fund size during the review period. In terms of asset allocation, approximately 60% of the portfolio was invested in Treasury Bills, 33% in PIBs, and ~6% in cash, reflecting a predominantly sovereign-oriented portfolio with a meaningful duration tilt towards longer-tenor government instruments, consistent with the Fund's income-generating objective. From a credit quality perspective, approximately 99.71% of the Fund's assets were invested in AAA rated instruments and Government Securities, with a negligible ~0.29% allocated to A+ rated instruments. This near-exclusively sovereign credit profile is considered an exceptional credit strength of the Fund, providing the highest possible quality anchor to the portfolio and effectively eliminating credit risk as a material concern within the overall risk assessment. The Fund's Weighted Average Maturity (WAM) stood at 237 days as of Dec'25, reflecting moderate-to-high sensitivity to interest rate movements. This extended duration positioning, while introducing mark-to-market sensitivity, is consistent with the Fund's strategy of capturing higher yields on longer-tenor sovereign instruments across varying market cycles. Meanwhile, the unit holding pattern reflects a high degree of concentration, with the top 10 investors accounting for ~90% of the Fund's total holdings, of which ~80% comprise associated companies which are typically sticky in nature, providing a highly stable and captive investor base. This significantly mitigates the redemption risk that would otherwise be associated with such a narrow unit holder profile. In terms of performance, the Fund reported an annualized one-year return of 11.22% as of Dec'25, against a benchmark return of 11.11%, reflecting an outperformance of approximately 11 basis points. This relative performance is attributable to the Fund's well-timed and concentrated positioning in longer-tenor PIBs, which have significantly benefited from the prevailing interest rate easing cycle.
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.