In FY25, the KMI-30 Index surged ~46.23%, driven by macroeconomic stabilization, a cumulative 1,100 bps monetary easing cycle, and improved investor sentiment. While many Islamic Asset Allocation Funds leaned heavily into equities to capture upside, the Faysal Islamic Asset Allocation Fund (FIAAF) maintained a disciplined, capital-preserving stance with no direct equity exposure. Instead, FIAAF generated returns through Shariah-compliant cash placements and fixed income instruments, allocating ~86.9% to cash placements, ~7.7% to sukuk, ~4.8% to ijara sukuk, and ~0.6% to other assets as of June 2025. From a credit quality perspective, the portfolio remained firmly anchored in high-grade exposures, led by A+ rated instruments (81.75%), followed by AA (5.49%), Government Securities (4.81%), A (4.09%), AA+ (2.83%), receivables (0.61%), and A- (0.42%).

The Fund posted a 1-year return of ~19.61%, below the category average of ~29.87% and well under the equity-driven KMI-30. However, PACRA’s risk-adjusted performance model rewards not just return, but also volatility control and downside protection. FIAAF delivered highest risk-adjusted returns in the category (17.63%), with minimal drawdown (0.09%) and a leading stability score. This resulted in the second highest performance score among peers, earning it an upgrade to a 5-Star ranking. FIAAF’s performance reflects a strategy rooted in stability, Shariah compliance, and tactical allocation, enabling competitive, low-volatility returns and positioning the Fund as a resilient option amid changing market conditions.

Over the past three years, Pakistan’s capital markets have experienced alternating phases of volatility and recovery. Despite these shifts, the Islamic Asset Allocation category exhibited steady resilience, with PACRA ranking two funds out of twelve peers. The category’s average return stood at ~80%, with the highest performer exceeding 200%, largely on the back of aggressive equity exposure. Faysal Islamic Asset Allocation Fund (FIAAF) followed a markedly different path. The Fund maintained a conservative, liquidity-focused strategy with no direct equity exposure, instead generating returns through Shariah-compliant cash placements and fixed income instruments. This approach delivered a 3-year total return of ~68.02%, below the category average, but with one of the lowest volatility profiles and the second-highest risk-adjusted return (~5.29%) in the peer group.

As of June 2025, FIAAF’s portfolio comprised ~86.9% in cash placements, ~7.7% in sukuk, ~4.8% in ijara sukuk, and ~0.6% in other assets. Credit quality remained firmly anchored in high-grade exposures, led by A+ rated instruments (81.75%), followed by AA (5.49%), Government Securities (4.81%), A (4.09%), AA+ (2.83%), receivables (0.61%), and A- rated instruments (0.42%). The Fund’s upgrade to a 4-Star ranking reflects PACRA’s recognition of its ability to deliver competitive long-term results while keeping downside risk exceptionally low. FIAAF’s disciplined Shariah compliance, tactical asset rebalancing, and strong liquidity buffers position it as a resilient choice for investors seeking stability without entirely foregoing growth opportunities, even during extended periods of market turbulence.

Over the past five years, Pakistan’s capital markets have navigated persistent macroeconomic and structural challenges, including IMF program delays, fiscal imbalances, political instability, and pronounced swings in policy rates and inflation. Currency depreciation, a widening current account deficit, and shifting investor sentiment periodically tested market stability. Yet, the Islamic Asset Allocation category has demonstrated notable resilience, with PACRA ranking two funds out of twelve peers. The category’s average 5-year return was ~124.89%, while the top performer delivered ~202.63%, largely driven by aggressive equity positioning. Faysal Islamic Asset Allocation Fund (FIAAF) delivered a 5-year return of ~100.26%, below the category average but accompanied by one of the lowest volatility levels and among the highest risk-adjusted returns (~4.32%) in the peer group. The Fund’s 5-Star ranking reflects PACRA’s recognition that its consistent performance came with significantly lower downside risk, an outcome of its conservative, liquidity-focused investment approach.

As of June 2025, FIAAF maintained ~86.9% exposure in cash placements, ~7.7% in sukuk, ~4.8% in ijara sukuk, and ~0.6% in other assets. Credit quality remained firmly anchored in A+ rated instruments (81.75%), supplemented by AA (5.49%), Government Securities (4.81%), A (4.09%), AA+ (2.83%), receivables (0.61%), and A- rated instruments (0.42%). The Fund’s long-term track record underscores its ability to deliver competitive returns while preserving capital through disciplined Shariah compliance, tactical rebalancing, and robust liquidity buffers, positioning it as a resilient option for investors seeking stability across economic cycles.