PACRA Maintains Stability Rating of Atlas Sovereign Fund

Atlas Sovereign Fund ("ASF" or the "Fund") is a medium profile Fund. The objective of Atlas Sovereign Fund is to generate competitive returns by investing in Government Securities and Debt Instruments. The assigned rating reflects the Fund's low credit and interest rate risk profile emanating from its investment strategy. As of December 2024, the Fund’s asset allocation was primarily focused on T-bills (~53.85%), followed by Pakistan Investment Bonds (PIBs) at ~41.14%, Sukuks at ~2.14%, bank deposits at ~1.34%, and the remaining ~1.54% allocated to other instruments. In terms of credit quality, approximately ~97.03% of the portfolio was invested in AAA-rated or Government Securities, ~2.87% in AA+ rated instruments, and ~0.10% in A+ rated avenues. As of end-Dec’24, the Fund's Weighted Average Maturity (WAM) stood at 406 days, reflecting pronounced exposure to credit spread volatility. The portfolio duration was recorded at 355 days, indicating elevated interest rate sensitivity to yield curve movements. While the unit-holding pattern exhibits notable investor concentration, with the top 10 unitholders comprising 95.18% of the AUM, the inherent redemption risk is partially mitigated by the presence of a strategically aligned associated entity, which holds 58.71% of this concentration offering a cushion of stability and lowering the liquidity risk profile of the fund.
Going forward, the material changes in the Fund's asset allocation strategy, which could impact the Fund's credit quality and exposure to interest rate risk, would remain critical for the rating.

About the Entity
AAML, incorporated in August 2002, is a wholly owned subsidiary of Shirazi Investments (Pvt.) Limited – the holding company of Atlas Group. Atlas Group, founded in 1962 with the establishment of Shirazi Investments, is a diversified group with having presence in manufacturing, power, financial services, and trading. The Company’s seven-member Board of Directors comprises five representatives of Atlas Group including the CEO, the other two are independent directors. Mr. Iftikhar H. Shirazi serves as the Chairman of the Board of Directors of AAML along with several other companies of the Group. The board has three committees to provide oversight on the Company’s affairs: 1) Audit Committee, 2) Human Resource & Remuneration Committee, and 3) Investment Committee. The Company had AUMs of PKR 121,164 mln at end Dec'24.