Karachi: The Pakistan Credit Rating Agency Limited (PACRA) has upheld the stability rating of ABL Islamic Sovereign Fund, maintaining it under a medium-risk profile. ABL-ISF aims to provide competitive returns by preserving capital through investments in Shariah-compliant government securities and other money market instruments. Despite a significant contraction in its Assets Under Management, from PKR 2,511 million to PKR 770 million, the Fund’s focus on government-backed instruments remains firm.

According to The Pakistan Credit Rating Agency Limited, approximately 90% of ABL-ISF’s portfolio is invested in government-guaranteed instruments, with a substantial 92% of assets rated AAA or in government securities. The Fund’s Weighted Average Maturity is currently 705 days, indicating high sensitivity to interest rate changes. The concentration of unit holdings remains high, with the top ten investors holding 79% of the Fund’s assets, including 40% from associated companies and provident funds. This concentration is balanced by the liquidity of government-backed investments.

The Fund’s annualized year-to-date return stands at 9.45%, slightly underperforming its benchmark return of 9.73% and the peer average of 10.86%. PACRA notes that any significant changes in investment policy or adherence to rating criteria could impact the Fund’s ratings in the future.