PACRA Upgrades the Stability Rating of MCB Government Securities Fund

MCB Government Securities Fund (or the “Fund”) is categorized under a moderate risk profile and is designed to provide investors with a sovereign-anchored investment avenue, offering stability through exposure to Government-backed instruments. The Fund currently has one allocation plan under its umbrella, MCB Government Securities Plan I (“MCB GSP-I” or the “Plan”), which was launched on November 5, 2024. The stated objective of the Plan is to seek the maximum possible rate of return by investing primarily in Government Securities. As of June 2025, the Plan reported Assets under Management (AUM) of PKR 38,606 million. The portfolio remained sovereign-heavy, with ~66.9% invested in floating-rate Pakistan Investment Bonds (PIBs) and ~25.3% in cash placements with banks, complemented by ~6.5% in Treasury Bills, and a negligible ~1.3% in receivables/others. In credit quality terms, this translated into ~73.4% sovereign/AAA-equivalent exposure, ~25.3% with an AA+ rated commercial bank, and ~1.3% in non-rated receivables. The WAM of the fund (1241 days) appears to be higher side of the spectrum, despite sizeable PIBs holding, which are floater. The management has represented that the related calculation mechanism is evolving, which would capture the true essence of the bonds' pricing structure. Since the interest rate curve is downward sloping, the related risk is minimum for the time being. Consequently, following this reassessment, the Fund's rating has been upgraded to AA from the initial AA-. As of June 2025, the top ten investors represented ~64.8% of Net Assets, with a significant portion of ~60% attributable to affiliated corporates and institutions. While such concentration heightens susceptibility to large-ticket redemptions, comfort is drawn from the sizeable affiliate-linked share, which provides stability and mitigates volatility in redemption patterns. Since inception in November 2024 through June 2025, the Plan delivered an annualized return of ~12.58%, compared to the benchmark return of ~11.77%. This translated into a year-to-date return of ~8.37% as of June 2025. Performance reflected the stabilizing role of sovereign exposures, supplemented by tactical liquidity deployment, while volatility remained contained at ~0.6%, consistent with the Plan’s conservative structure.
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
MCB Investment Management Limited (MCBIM) is a public listed company regulated by the Securities and Exchange Commission of Pakistan (SECP). It holds licenses for asset management, investment advisory, and pension fund management, catering to both Conventional and Shariah investment solutions. As of Sep 2025, MCBIM manages a diversified portfolio, including 26 Open-End Mutual Funds and 4 Voluntary Pension Schemes, while also maintaining a leading position in Separately Managed Accounts (SMA) and investment advisory services. MCBIM’s major shareholders include MCB Bank Limited (~81.42%), Adamjee Insurance Company Limited (~7.59%), and the general public (~9.28%). Mr. Khawaja Khalil Shah serves as the Chief Executive Officer of the company. The Board comprises a balanced composition of 4 Non-Executive Directors and 3 Independent Directors, ensuring robust governance, objective decision-making, and alignment with regulatory best practices. The Company’s assets under management (AUM) have grown significantly, reaching approximately PKR 393 Billion as of June 2025, reflecting its strong market presence and consistent growth in Pakistan’s asset management industry.