During CY24, Pakistan’s equity market experienced a strong bull run, with KSE-100, KSE-30, and KMI-30 indices gaining ~84.36%, 74.47%, and ~70.56%, respectively. Key drivers included the IMF program approval, monetary easing, revived foreign interest, PKR/USD stabilization, and a rise in foreign exchange reserves to USD 15.9 billion by Dec'24. In this environment, PACRA rated two funds in the Islamic asset allocation category, with Faysal Islamic Asset Allocation Fund receiving a 3-Star rating. The Fund posted a 1-year return of ~23.50%, below the category average of ~42.09%. Despite this, its strategy remained diversified and cautious, with a focus on AAA-rated instruments (~40.38%). Other assets included AA+ (~10.30%), AA (~3.52%), and A-rated instruments (~41.59%). The Fund’s allocation reflects a risk-return balance aimed at stability while targeting higher yields. Although its return trailed peers, the Fund’s prudent, low-risk strategy positions it for long-term resilience amid macroeconomic challenges.

Over the three-year period, Pakistan’s capital markets faced challenges like delays in the IMF program, fiscal deficits, political uncertainty, and policy fluctuations. Despite this, the Islamic asset allocation category remained resilient, with PACRA rating two funds out of twelve. The category posted an average return of ~71.64%, with the top fund delivering ~168.20%. Faysal Islamic Asset Allocation Fund achieved a return of ~65.04% but saw its star rating decrease from 4 to 3 stars due to a recalibration of risk-adjusted returns. The Fund’s strategy balanced growth and liquidity, with ~40.38% invested in AAA-rated instruments for stability. The rest of the portfolio was diversified across AA+ (~10.30%), AA (~3.52%), and A-rated instruments (~41.59%). This diversified approach reflects a strong risk-return strategy. Despite the rating change, the Fund's disciplined strategy continues to target long-term sustainable returns.

Over the five-year period, Pakistan’s capital markets faced significant challenges, including IMF delays, fiscal imbalances, political uncertainty, and currency depreciation. Despite these, the Islamic asset allocation category remained resilient, with PACRA ranking two funds out of ten. The category average return was ~93.81%, with the top fund delivering ~157.30%. Faysal Islamic Asset Allocation Fund maintained a 5-Star rating, posting a return of ~84.81%. Though it trailed some peers in absolute returns, its 5-Star rating highlights superior risk-adjusted performance. As of Dec’24, the Fund allocated ~40.38% in AAA-rated instruments for capital preservation. The rest of the portfolio was diversified across AA+ (~10.30%), AA (~3.52%), A (~41.59%), and other ratings. The Fund’s disciplined strategy and consistent volatility management ensured stable long-term returns. Despite peer outperformance, the Fund’s balanced approach makes it a strong choice for investors seeking long-term capital appreciation with controlled risk.