Karachi: The Pakistan Credit Rating Agency Limited (PACRA) has maintained its stability rating for the ABL Government Securities Fund (ABL-GSF), a medium-risk profile fund focused on investing in government securities and other debt instruments. As of June 26, the fund's assets under management totaled PKR 5,674 million, a slight decrease from PKR 5,980 million in the previous review, indicating a marginal contraction in fund size.
According to PACRA, the ABL-GSF's asset allocation strategy primarily involves investment in Treasury Bills, Pakistan Investment Bonds (PIBs), and cash, with 52% of the portfolio in Treasury Bills and 32% in PIBs. The fund's allocation also includes 5% in commercial paper and a minor portion in TFCs/Sukuk. The composition reflects a strong sovereign-oriented portfolio with a tilt towards longer-tenor government instruments, aligning with the fund's objective of income generation.
The fund's credit quality remains robust, with approximately 93% of its assets invested in government securities and AAA-rated instruments. The remaining portfolio includes 5% in A1+ rated instruments and smaller portions in A+ rated and unrated exposures. The weighted average maturity of the fund's assets is 317 days, largely driven by its allocation to longer-tenor PIBs, which underscores its moderate-to-high sensitivity to interest rate movements.
The investor base of ABL-GSF shows moderate concentration, with the top 10 investors holding approximately 58% of the fund's total assets, providing a stable foundation due in part to the AMC's own sponsor holdings and provident funds. The fund's significant allocation in Treasury Bills and its adequate cash reserves ensure its capacity to meet redemption demands efficiently.
Performance-wise, the fund recorded a one-year return of 9.86% as of June 26, which is slightly below the benchmark return of 10.82%, marking an underperformance of 96 basis points. Any significant changes in the fund's investment policy or deviations from the rating criteria could potentially influence the current rating, PACRA noted.