Karachi: The Pakistan Credit Rating Agency Limited (PACRA) has assigned an initial stability rating to the Faysal Islamic Financial Growth Fund-II (FIFGF II), a medium-risk profile fund. The fund, which aims to generate competitive returns while seeking capital growth through a diversified portfolio of Shariah-compliant instruments, reported a significant increase in its assets under management, reaching approximately PKR 36.049 billion as of August 2026, compared to PKR 10.70 billion in December 2025.

According to PACRA, the fund's asset allocation as of August 2026 was primarily concentrated in cash and placements with banks, non-banking financial companies (NBFCs), and development finance institutions (DFIs), supplemented by investments in Ijarah Sukuk and short-term Sukuk. The fund's credit quality highlighted a significant portion in government securities and AAA-rated exposures, with a strategy of limiting new exposures below AA-.

The fund, managed with a weighted average maturity and modified duration of approximately 26 days, generated an annualized return of 10.69% for August 2026, outperforming its benchmark and peer average. Despite a concentrated unit holding, the fund's high allocation to liquid assets provides some mitigation against redemption pressures.

The stability rating is contingent on management's adherence to maintaining the fund's portfolio within designated credit quality thresholds and investment mandates, effectively managing liquidity, duration, counterparty, and investor concentration risks moving forward.