Karachi: The Pakistan Credit Rating Agency Limited (PACRA) has maintained the stability rating of the Alfalah Financial Sector Income Fund (AFSIF), classifying it as a moderate risk investment. The fund aims to enhance income and preserve capital, focusing on high-quality financial sector instruments.

According to The Pakistan Credit Rating Agency Limited announcement issued on 02 July 2024, as of the end of March 2024, AFSIF had assets under management amounting to PKR 3,129 million. The fund's investments were primarily in prime quality financial sector Term Finance Certificates (TFCs)/Sukuks and bank deposits, with significant allocations in Treasury Bills and Government of Pakistan Ijara sukuk, reflecting a balanced approach towards risk management.

The credit profile of AFSIF was bolstered by approximately 55% of its assets in A-rated avenues and 40% in AAA-rated securities. The fund allocated about 50% of its assets in bank deposits and placements, 20% in T-Bills, 18% in GOP Ijara sukuk, 5% in Pakistan Investment Bonds (PIBs), and the rest in other securities. The Weighted Average Maturity (WAM) of the fund was 130 days, indicating moderate exposure to credit risk, while its Duration of 285 days suggests a moderate exposure to interest rate risk. The concentration of the top 10 investors was around 42.51%, presenting a moderate level of redemption pressure.

PACRA notes that any significant changes in AFSIF’s investment strategy or adjustments to the rating criteria could influence future ratings. This ongoing assessment will ensure that the fund continues to meet its objectives effectively amid varying market conditions.