Lahore: The Pakistan Credit Rating Agency Limited (PACRA) has announced that it will maintain the stability rating of the MCB Government Securities Fund, a medium-risk investment vehicle primarily focused on government securities. As of September 26, the fund's assets under management were reported at PKR 13,972 million, reflecting a decrease from PKR 22,232 million reported during the last review in March.

According to PACRA, the fund maintains a predominantly sovereign portfolio, with approximately 99% of its assets invested in government securities and AAA-rated instruments. This allocation strategy provides a strong quality anchor for the fund's credit profile. The fund's weighted average maturity stands at 840 days, largely due to its significant investment in longer-tenor Pakistan Investment Bonds (PIBs).

Despite the high concentration of holdings, with the top 10 investors accounting for about 85% of the total holdings, the fund is considered to have adequate liquidity. This is supported by a substantial cash allocation of approximately 43% and a dominant holding in highly liquid government securities, which are expected to meet potential redemption demands effectively.

In terms of performance, the fund has delivered a 365-day annualized return of 9.42%, trailing the benchmark return of 11.01% by 159 basis points. This underperformance is attributed to the fund's positioning in longer-tenor PIBs amid the current interest rate environment. PACRA cautions that any significant shifts in asset allocation could impact the fund's credit quality and sensitivity to interest rate changes, thereby affecting its rating.