The Pakistan Credit Rating Agency Limited
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Madiha Sohail

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PACRA Maintains Stability Rating of AWT Islamic 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 Islamic Income Fund (or the "Fund") is medium risk profile Fund. The investments objective of the Fund is to generate competitive risk adjusted returns by investing in short, medium and long-term shariah compliant fixed income instrument. The assigned rating reflects the Fund's moderate credit risk profile emanating from its investment policy. The Fund had allocated ~71.2% in Bank deposits, placements & other banking instruments in AA- rated and above, ~1.8% in Government securities (GOP Ijara Sukuks), ~25.1% in Corporate Sukuks in AA rated and above. At the end of June '23, the Fund duration was only 19 days, indicating low interest rate risk. The WAM of Fund stands at 104 days. During FY23, AWT Islamic Income Fund delivered an annualized return of 17.1% against its benchmark return of 6.0% p.a. Net Assets of the Fund stood at PKR 1,794 million, showing an increase of 587% from June'22 level of PKR 261 million. Further overall performance of the fund remained above industry average return. Fund concentration among its top 10 investors was ~52.5% as of June 23, exposing the Fund to moderate level of 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.