The Pakistan Credit Rating Agency Limited
Press Release


Muhammad Azmat Shaheen

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PACRA Upgrades Stability Rating of AKD Islamic Income Fund

Rating Type Stability Rating
(02-Sep-22 )
(08-Mar-22 )
Action Upgrade Maintain
Long Term AA-(f) A+(f)
Short Term - -
Outlook Stable Stable
Rating Watch - -

The rating reflects the fund's moderate credit risk profile emanating from its investment strategy to invest in good credit quality investment avenues with sound liquidity. At end Jun'22, 59.4% of the Fund's assets were allocated to Sukuks ('A+' rated and above), 37.5% to Cash with banks rated A+ and above, whereas 3.1% were others. As per the investment policy, the Fund can invest up to 75% in sukuks, the current strategy is in line with the investment policy. The net assets of the Fund has shown an increase of 26.1% and stood at PKR 893mln (Dec'21: PKR 708mln). The Fund consistently managed to stabilize the returns during FY22 and beat the benchmark along with industry average. The unit holding pattern of the fund emanates redemption risk as top 10 investors represent 70.1% of the fund's assets. The fund should diversify its investments to minimize concentration risk. As at end Jun'22, the WAM of the Fund was reported at 428 days primarily, due to investments in sukuks. The duration of the fund is within range at 58 days representing low interest rate risk.
Going forward, the fund intends to maintain its current exposure in Cash and Sukuks. Material changes in the fund's asset allocation strategy, impacting its credit quality and/or exposure to interest rate risk, would affect the rating.

About the Entity
AKD Investment Management Limited commenced its operations in September 2004. The Company is registered as an Asset Management Company under the Non-Banking Finance Companies Rules, 2003. The Company is sponsored by AKD Group Holdings (Private) Limited [Formerly: Aqeel Karim Dhedhi Securities(Private) Limited] (99.97% ownership). The Board of Directors of the Company comprises seven members, including the CEO Mr. Imran Motiwala, who has been serving as the Chief Executive Officer of AKD Investment Management Limited since 2009. The Company is currently managing seven open-end funds with assets under management of ~PKR 6.8bln at end Jun'22.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.