Karachi: The Pakistan Credit Rating Agency Limited (PACRA) has maintained the stability rating of the ABL Islamic Sovereign Fund (ABL-ISF), which operates under a medium-risk profile. The Fund, which aims to provide competitive returns through Shariah-compliant investments, saw its Assets Under Management (AUM) decrease significantly to PKR 296 million as of June 26, down from PKR 770 million in the previous review period.

According to PACRA, the Fund's portfolio is heavily invested in Government Guaranteed Securities, accounting for approximately 85% of its asset allocation. The remainder is held in cash and other investments, in line with the Fund's Shariah-compliant sovereign income mandate. The Fund's overall credit quality remains strong, with 88% of assets in Government Securities and AAA rated instruments. The remaining investments are distributed among AA+, AA-, A+ rated instruments, and a small portion in unrated exposures.

The Fund's Weighted Average Maturity (WAM) stood at 848 days, driven by allocations to longer-term Government Guaranteed Securities. This reflects the Fund's strategy to capture returns through longer-tenor sovereign instruments, consistent with its medium-risk profile. Despite a high concentration of holdings among the top 10 investors, including a significant sponsor holding, the Fund's reliance on highly liquid Government Guaranteed Securities offers stability and resilience.

The Fund delivered a one-year return of 7.41% as of June 26, underperforming its benchmark return of 9.93% by 252 basis points. Any significant changes in investment policy or non-compliance with rating criteria could impact the Fund's rating in the future.