The Pakistan Credit Rating Agency Limited
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Madiha Sohail

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PACRA Maintains Stability Rating of AWT Income Fund

Rating Type Stability Rating
(13-Oct-23 )
(13-Apr-23 )
Action Maintain Maintain
Long Term A+(f) A+(f)
Short Term - -
Outlook Stable Stable
Rating Watch - -

AWT Income Fund (or the "fund") is a medium risk profile Fund. The objective of the Fund, is to generate competitive returns by investing in short to long term debt instruments and securities. The Fund had allocated ~39.4% in Government securities (PIBs, Floater PIBs & T-Bills), ~39.1% in Bank deposits, placements & other banking instruments in A+ rated and above, ~23.1% in Sukuks in AA rated and above. The duration of the Fund stood at 71 days limiting the Fund exposure to Interest rate risk. While the WAM of the Fund stood at 600 days at the end Jun’23, exposing the Fund to high credit risk. However, credit risk is manageable due to investment in Govt securities and other high rated avenues. During FY23, AWT Income Fund delivered an annualized return of 17% against its benchmark return of 18.3% p.a. Fund stood at PKR 1,723 million, showing an increase of 16% from June 30, 2022, level of PKR 1,480 million. Further overall performance of the fund remained above industry average return. At the end of June '23, the concentration of the Fund's top 10 investors was ~50.4%, resulting in moderate redemption pressure.
Going forward, any material changes in the Fund's asset allocation strategy, which could negatively impact the Fund's credit quality and exposure to interest rate risk, remain critical for the rating.

About the Entity
AWT Investments Limited is a public unlisted company, incorporated in 2011. It is a Non-Banking Finance Company, licensed by the Securities and Exchange Commission of Pakistan to manage open and closed-end funds and Investment Advisory Services. The Company is a wholly-owned subsidiary of Army Welfare Trust. The Board of Directors of the Company comprises five members. The CEO of the Company Mr. Sajjad Anwar. He is a CFA charter holder and has over 21 years of experience that involves Equity Research, Portfolio Management, Investment Advisory, Risk Management, and Finance & Accounts. For the last 15 years, he has been working in the Fund Management Industry. Before becoming CEO at AWTIL, he was performing the role of Chief Investment Officer at NBP Funds. The Company's six-member Board of directors includes five director and the CEO. With overall assets under management of PKR 7.3bln at the end June'23. AWT Investment Limited now managing four conventional funds and two shariah complaint funds.

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.