In CY25, Pakistan’s equity market delivered an exceptional performance, with the KSE-30 Index advancing by approximately 49% during the year. The strong rally was underpinned by improving macroeconomic fundamentals, enhanced investor confidence, and sustained policy support. Continued engagement with the International Monetary Fund, including disbursements of approximately USD 1.2 billion under ongoing programs, reinforced external stability, while foreign exchange reserves held by the State Bank of Pakistan strengthened to above USD 15.8 billion by year-end. Concurrent monetary easing, relative stability in the PKR, and resilient remittance inflows further bolstered market liquidity and overall sentiment. Against this favorable backdrop, asset allocation funds were well positioned to capitalize on the equity market upside, while their fixed-income exposures continued to provide portfolio stability and risk mitigation. Within the Asset Allocation Fund category, PACRA assigned ratings to one out of twelve funds, with the category posting an average annual return of approximately 39%. The NBP Sarmaya Izafa Fund achieved a 4-Star ranking, delivering a one-year return of approximately 49%, while the top-performing fund within the category generated a return of 62%. As of December 2025, the Fund maintained a high equity allocation of approximately 83.1%, complemented by 12.7% in cash, 2.1% in TFCs/Sukuks, and the remainder invested in other instruments. Sector-wise, the portfolio was primarily concentrated in Commercial Banks (20.1%), Oil & Gas Exploration (14.8%), Fertilizers (10.9%), Cement (9.9%), and Textile Composite (7.6%), with the remaining 19.8% diversified across other sectors.

Over the past three years, Pakistan’s market navigated persistent inflationary pressures, sharp currency depreciation, external financing constraints, and prolonged political uncertainty, alongside a consistently high interest rate environment; despite these macro headwinds, the KMI-30 Index delivered cumulative gains of roughly ~263% across three years, supported by stabilization under the IMF program, gradual monetary easing, strengthening foreign exchange reserves, improving current account dynamics, and resilient corporate profitability, positioning Pakistan among the top-performing frontier markets during this period. Despite this, Asset Allocation category showed resilience, with the average return at ~188%. NBP Sarmaya Izafa Fund received a 4-Star ranking, posting a return of ~296%. As of December 2025, the Fund maintained a high equity allocation of approximately 83.1%, complemented by 12.7% in cash, 2.1% in TFCs/Sukuks, and the remainder invested in other instruments. Sector-wise, the portfolio was primarily concentrated in Commercial Banks (20.1%), Oil & Gas Exploration (14.8%), Fertilizers (10.9%), Cement (9.9%), and Textile Composite (7.6%), with the remaining 19.8% diversified across other sectors.

Over five years, Pakistan’s market faced high inflation, PKR depreciation, external financing stress, and political uncertainty, but improved macro stability, IMF support, stronger FX reserves, and easing rates from CY23 fueled a strong recovery, with the KSE-30 Index delivering multi-year gains and emerging as a top-performing frontier market. Despite this, Asset Allocation Fund category showed resilience, with the average return at ~180%. NBP Sarmaya Izafa Fund received a 4-Star ranking, posting a return of ~272%. As of December 2025, the Fund maintained a high equity allocation of approximately 83.1%, complemented by 12.7% in cash, 2.1% in TFCs/Sukuks, and the remainder invested in other instruments. Sector-wise, the portfolio was primarily concentrated in Commercial Banks (20.1%), Oil & Gas Exploration (14.8%), Fertilizers (10.9%), Cement (9.9%), and Textile Composite (7.6%), with the remaining 19.8% diversified across other sectors.