Islamabad: The Pakistan Credit Rating Agency Limited (PACRA) has reaffirmed the AWT Islamic Income Fund’s stability rating at A+(f) with a stable outlook, highlighting its consistent performance and prudent investment strategy in Shariah-compliant fixed income instruments. This medium risk profile fund continues to exhibit a strong ability to manage and mitigate risk through diversified investments.

According to The Pakistan Credit Rating Agency Limited, the AWT Islamic Income Fund focuses on generating competitive risk-adjusted returns by investing in a variety of short, medium, and long-term Shariah-compliant financial instruments. As of the end of June 2024, the fund’s investments were predominantly placed in high credit quality avenues, with 58.52% in AA-rated securities, 21.95% in AAA/government securities, and the remainder in A+ and other ratings.

The fund’s asset allocation strategy includes 28.39% in cash and bank placements, 27.7% in Bai Muajjal (a Shariah-compliant credit sale), 26.8% in short-term Sukuk, and smaller proportions in other Islamic financial instruments such as GOP Ijarah Sukuk and Certificates of Musharaka. This diversified portfolio composition has enabled the fund to maintain a stable rating by effectively balancing risk and return.

The fund’s duration stood at 86 days as of June 2024, indicating moderate exposure to interest rate risk, while the Weighted Average Maturity (WAM) of 198 days points to a controlled high credit risk environment. The relatively low concentration of top 10 investors, which stands at 13.43%, further mitigates redemption pressure, enhancing the fund’s stability and attractiveness to a broader investor base.

PACRA notes that any future changes in the fund’s investment policy or adjustments to the rating criteria could potentially affect its stability rating.