Karachi: The Pakistan Credit Rating Agency Limited (PACRA) has reaffirmed the stability rating of the AKD Islamic Income Fund (AKDISIF), which is recognized for its low-risk profile and commitment to providing halal income through Shariah-compliant investments.

According to The Pakistan Credit Rating Agency Limited, as of the end of June 2024, the asset allocation of the AKD Islamic Income Fund included approximately 39.7% in bank placements, 24.8% in Sukuk, 18.9% in government securities, 12.9% in commercial papers/short-term Sukuk, and 3.8% in other assets. The credit quality of the fund was notably segmented with around 40.0% in AA, 34.0% in A, and 22.0% in government securities or AAA-rated avenues, aiming to balance high credit risk with strategic investments in secure assets.

The fund’s Weighted Average Maturity (WAM) of 262 days highlights its exposure to high credit risk, counterbalanced by investments in government securities. With a duration of 90 days, the fund faces moderate interest rate risk. The report also pointed out a high level of investor concentration, with the top ten investors holding about 68.6% of the units, posing a significant redemption risk. However, PACRA noted that the fund effectively manages this risk by maintaining sufficient liquidity.

PACRA underscored that future changes to the fund’s investment policy or adjustments in the rating criteria could impact the stability rating.