Islamabad: The Pakistan Credit Rating Agency Limited (PACRA) has affirmed the AA-(f) stability rating of the Alfalah GHP Islamic Income Fund with a stable outlook in its latest evaluation. This rating signifies the fund’s robust position in the market, driven by its prudent investment strategies and adherence to shariah-compliant fixed-income investments.

According to The Pakistan Credit Rating Agency Limited, the Alfalah GHP Islamic Income Fund has consistently maintained its focus on minimizing risk while ensuring competitive returns for its unit holders. As of the end of June 2024, the fund has allocated approximately 37.5% of its assets in bank placements, 34.3% in TFC/Sukuk, and 24.1% in government securities, with the remainder invested in other assets.

The fund’s credit quality remains strong, with significant investments rated as AAA (37.1%) and no investment falling below the AA- category. This strategic asset allocation has effectively managed the fund’s credit risk, keeping it at a low level, while its short duration of 59 days as of June 2024 suggests minimal interest rate risk. The Weighted Average Maturity (WAM) of the fund stood at 763 days, indicating a robust credit risk management strategy through substantial government securities holdings.

The concentration of investments among the top ten investors was around 30.3%, indicating a diversified and stable investment base that mitigates the risk of high redemption pressures. PACRA notes that the fund’s continued adherence to its investment policy and the maintenance of its rating criteria are pivotal for sustaining its current rating status.