PACRA Maintains Stability Rating of Pakistan Income Enhancement Fund

Pakistan Income Enhancement Fund ("the Fund") represents a moderate-risk fixed income solution employing an active strategy to enhance returns through extended duration exposure while maintaining strong sovereign credit linkages. The Fund's investment approach strategically balances Pakistan's debt market opportunities with disciplined risk parameters, targeting investors with higher risk tolerance seeking improved yields. As of December 2024, the Fund reported Assets Under Management (AUM) of PKR 20.1 billion, reflecting its established position in Pakistan's yield-enhancement fund category. In terms of asset class, 58% of assets were allocated to Treasury Bills, 32% to Pakistan Investment Bonds (PIBs), and 3% to Government of Pakistan Ijara Sukuks, with residual investments in other approved securities. The Fund demonstrates exceptional credit quality metrics, with approximately 97% of assets invested in Government Securities and AAA-rated instruments, with minimal exposure to other investment-grade assets. This near-exclusive sovereign concentration provides substantial default risk mitigation while allowing for duration-driven yield enhancement. With a weighted average maturity (WAM) of 657 days (approximately 1.8 years) as of December 2024, the Fund maintains meaningful exposure to interest rate risk, though this is partially offset by its overwhelming allocation to government securities. The intermediate-term maturity profile enables the Fund to capture Pakistan's steep yield curve premiums while maintaining liquidity through its T-Bill allocation.
Going forward, any material changes in the investment policy and/or compliance with the rating criteria for the assigned rating would have an impact on the ratings.

About the Entity
MCB Investment Management Limited (MCBIM) is a public listed company regulated by the Securities and Exchange Commission of Pakistan (SECP). It holds licenses for asset management, investment advisory, and pension fund management, catering to both Conventional and Shariah investment solutions. As of December 2024, MCBIM manages a diversified portfolio, including 26 Open-End Mutual Funds and 4 Voluntary Pension Schemes, while also maintaining a leading position in Separately Managed Accounts (SMA) and investment advisory services. MCBIM’s major shareholders include MCB Bank Limited (~81.42%), Adamjee Insurance Company Limited (~7.59%), and the general public (~9.28%). Mr. Khawaja Khalil Shah serves as the Chief Executive Officer of the company. The Board comprises a balanced composition of 4 Non-Executive Directors and 3 Independent Directors, ensuring robust governance, objective decision-making, and alignment with regulatory best practices. The Company’s assets under management (AUM) have grown significantly, reaching approximately PKR 588 Billion as of December 2024, reflecting its strong market presence and consistent growth in Pakistan’s asset management industry.