Islamabad: The Pakistan Credit Rating Agency Limited (ACRA) has once again affirmed the AA-(f) stability rating for the Faysal Savings Growth Fund, maintaining a stable outlook despite significant investor concentration and ongoing credit risks. The fund, known for its conservative investment strategy, primarily targets debt and fixed income instruments that meet investment-grade criteria.

According to The Pakistan Credit Rating Agency Limited, the Faysal Savings Growth Fund has successfully managed its portfolio to align with the agency’s stringent rating standards as of the end of June 2024. The fund’s investments are strategically diversified, with 55.24% allocated to AA- rated securities, 31.80% to government or AAA-rated securities, and a minor fraction in A-rated avenues.

The asset allocation details reveal a substantial preference for liquidity and safety, with 47.69% of the fund’s capital placed in banks as cash and placements, followed by 27.59% in Pakistan Investment Bonds (PIBs), and smaller percentages in TFC/Sukuks and Ijarah Sukuk. This conservative positioning reflects the fund’s goal to balance return on investment with risk minimization.

Despite these precautions, the fund’s Weighted Average Maturity (WAM) of 624 days suggests a high credit risk profile, while a short duration of 36 days helps mitigate potential interest rate risks. However, a notable area of concern is the high concentration of assets among the top ten investors, accounting for 68.46% of the fund’s total assets, which could lead to significant redemption pressures under adverse market conditions.

ACRA has indicated that any significant changes in the fund’s investment strategy or deviations from established rating criteria could influence future stability ratings, underscoring the importance of maintaining current management practices to sustain investor confidence and fund stability.