Karachi: The Pakistan Credit Rating Agency Limited (PACRA) has reaffirmed the stability rating of the Alfalah Islamic Sovereign Fund (AISF), acknowledging its low-risk profile and robust investment strategy. The fund focuses on generating competitive returns and income enhancement through diversified investments in high-quality financial instruments.
According to The Pakistan Credit Rating Agency Limited announcement issued on 02 July 2024, as of the end of March 2024, AISF managed assets totaling PKR 4,223 million. The fund's investment portfolio at that time was strongly positioned in credit quality, with approximately 84% of its assets in AAA-rated categories and about 6% in AA-rated avenues. This composition underpins the fund's solid credit standing and its strategic emphasis on minimizing risk while targeting stable returns.
The fund's allocation strategy as of March 2024 included roughly 83% in Government of Pakistan Ijara sukuk, with an additional 5% placed in bank deposits and other financial placements. The remainder of the fund's assets were invested in various instruments, reflecting a diversified approach to asset management. Despite the substantial focus on government-backed sukuk, which suggests a conservative investment stance, the fund's Weighted Average Maturity (WAM) of 851 days indicates a high exposure to credit risk. Conversely, the Duration of the Fund, standing at 62 days, points to a moderate exposure to interest rate risk.
The concentration of investments among the top 10 investors in the fund was around 45.37% as of March 2024, which introduces a moderate level of redemption pressure. This concentration level highlights the importance of maintaining a balanced investor base to mitigate potential liquidity challenges.
PACRA notes that any future changes to AISF’s investment policy or adjustments to the criteria used for determining its rating could influence the stability rating of the fund. As such, ongoing monitoring and strategic adjustments will be crucial for maintaining its current rating status.