PACRA Maintains the Stability Rating of MCB DCF Income Fund

MCB DCF Income Fund ("MCB-DCFIF" or "the Fund") is categorized under a medium-risk profile, with the objective of delivering superior fixed income returns through investment in an optimal mix of authorized debt instruments while taking into account capital security and liquidity considerations. As of Jun'26, the Fund's Assets Under Management (AUM) stood at PKR 16,084mln, compared to PKR 18,760mln as of the last review, reflecting a contraction in fund size, primarily attributable to an overall reduction in the income fund category size. In terms of asset allocation, approximately 45% of the portfolio was invested in cash, 26% in PIBs, 15% in Treasury Bills, 8% in TFCs/Sukuks, and ~5% in GoP Ijarah Sukuks, reflecting a well-diversified fixed income portfolio spanning the yield curve with a meaningful duration tilt towards longer-tenor sovereign instruments, complemented by a substantial cash allocation that provides a very strong liquidity buffer. From a credit quality perspective, approximately 89% of the Fund's assets were invested in Government Securities and AAA rated instruments, ~3% in AA+ rated avenues, and ~0.6% in A+ rated instruments, with the remainder in other exposures. The overall credit profile is considered very strong and is fully compliant with the assigned rating criteria, with the dominant sovereign and investment-grade allocation providing the highest possible quality anchor to the portfolio. The Fund's Weighted Average Maturity (WAM) stood at 335 days as of Jun'26, reflecting high sensitivity to interest rate movements, which is broadly consistent with the Fund's medium-risk income mandate and its strategy of capturing superior yields across varying tenor fixed income instruments. While this extended duration positioning introduces meaningful mark-to-market sensitivity, the Fund's substantial cash and T-Bill allocation provides a meaningful near-term liquidity buffer and a partial offset to the interest rate risk inherent in its PIB and longer-tenor instrument exposures. In terms of performance, the Fund reported an annualized one-year return of 9.11% as of Jun'26, against a benchmark return of 10.61%, reflecting an underperformance of approximately 150 basis points. This performance gap is broadly attributable to the Fund's conservative portfolio positioning and meaningful cash allocation during the review period, which, while preserving capital and maintaining very strong liquidity, has modestly constrained yield optimization relative to the benchmark.
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 Dec 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 strong governance, objective decision-making, and alignment with regulatory best practices. The Company’s assets under management (AUM) have grown significantly, reaching ~PKR 387 Billion as of Jun'26.