PACRA Maintains the Stability Rating of Alfalah Financial Sector Income Fund

Alfalah Financial Sector Income Fund ("AFSIF" or "the Fund") is categorized under a medium-risk Income Scheme, with the objective of providing income enhancement and capital preservation through investments in prime-quality financial sector TFCs/Sukuks, bank deposits, spread transactions, and short-term money market instruments. The Fund is designed to deliver competitive risk-adjusted returns while maintaining prudent credit quality and liquidity management. As of Mar'26, the Fund's Assets Under Management (AUM) stood at PKR 17,750mln, compared to PKR 14,418mln as of Sep'25 (the last review), reflecting a notable increase in fund size during the review period and indicating continued investor confidence in the Fund's investment strategy and performance. In terms of asset allocation, approximately 74% of the portfolio was maintained in cash and cash equivalents, while ~15.6% was invested in Treasury Bills (T-Bills) and ~9.5% in Pakistan Investment Bonds (PIBs). The portfolio remained conservatively positioned, with a significant liquidity buffer and meaningful exposure to sovereign instruments, supporting both capital preservation and portfolio flexibility. From a credit quality perspective, approximately 39% of the Fund's assets were invested in AAA-rated instruments, ~28% in A+ rated avenues, and ~32% in A-rated exposures. The overall credit profile remains commensurate with the assigned rating, supported by diversification across investment-grade counterparties and a prudent approach toward risk management. The portfolio's exposure to quality institutions and sovereign-backed instruments continues to provide stability to the Fund's credit profile. The Fund's Weighted Average Maturity (WAM) stood at 47 days as of Mar'26, reflecting low sensitivity to interest rate movements and credit risk. The short-duration profile enables the Fund to maintain liquidity, efficiently manage reinvestment opportunities, and respond effectively to evolving market conditions. In terms of performance, the Fund generated a 365-day return of 10.63% as of Mar'26, marginally outperforming its benchmark return of 10.62%. The Fund's ability to match and slightly exceed benchmark performance reflects effective portfolio management and disciplined execution of its investment strategy despite maintaining a highly liquid asset allocation throughout the review period.
Going forward, any material changes in the investment policy or the devised rating criteria for the assigned rating would have an impact on the rating.

About the Entity
Alfalah Asset Management Limited was incorporated on October 18, 2004 as an unlisted public limited company and is licensed by the Securities and Exchange Commission of Pakistan to manage open-ended mutual funds and offer investment advisory services. The Company was established as joint venture Non-Banking Finance Company by Bank Alfalah Limited and GHP Arbitrium. The Company provides a wide range of mutual funds and pension funds both in conventional and Shariah compliant category. The Company also provides investment advisory services to HNW individuals and corporate clients. The Company’s board of directors comprises eight members including the Chairman (Mr. Atif Aslam Bajwa) and the Chief Executive Officer (Mr. Khaldoon Bin Latif). The board is dominated by representatives of MAB Investments and Bank Alfalah Limited. The board has two independent and five non-executive directors. The board members possess strong profile and skills suited to the financial services industry. Assets under management of the Company stood at ~PKR 361bln at end Mar'26.