PACRA Maintains Stability Rating of Pakistan Income Enhancement Fund

Pakistan Income Enhancement Fund (“PIEF” or “the Fund”) is positioned under a medium-risk profile, with the objective of generating competitive returns through an active investment strategy in the debt and fixed income markets. The Fund primarily seeks to enhance returns by tactically allocating across sovereign securities and spread-based transactions while maintaining an adequate liquidity buffer. As of Dec’25, the Fund’s Assets Under Management (AUM) stood at PKR 2,632mln, compared to PKR 1,072mln in the last review (Jun'25), reflecting a notable increase in the Fund’s size during the review period and indicating improved investor participation. In terms of asset allocation, ~43% of the portfolio was invested in Pakistan Investment Bonds (PIBs), reflecting duration positioning to benefit from interest rate dynamics. Additionally, ~23% was allocated to spread transactions to enhance yield, ~16% in Treasury Bills, while ~13% was maintained in cash to support liquidity requirements, with the remaining invested in other permissible instruments. From a credit quality perspective, approximately ~61% of the Fund’s assets were invested in Government Securities and AAA rated instruments, ~12% in AA+ rated avenues, and ~1% in AA- rated exposures, with the remainder in other categories. This composition indicates a largely sound credit profile while allowing selective exposure to lower-rated instruments to capture incremental yield opportunities. As of Dec’25, the Fund’s Weighted Average Maturity (WAM) stood at 347 days, reflecting moderate duration exposure and a measured sensitivity to movements in interest rates, consistent with the Fund’s return enhancement strategy. The unit holding pattern reflects moderate investor concentration, with the top 10 investors accounting for ~46% of the Fund’s holdings, suggesting manageable redemption risk. In terms of performance, the Fund reported a year-to-date annualized return of 10.16% as of Dec’25, compared to the benchmark return of 11.18%, reflecting performance broadly aligned with the Fund’s investment positioning and prevailing market conditions.
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 rating.

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 Dec 2025, 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 strong governance, objective decision-making, and alignment with regulatory best practices. The Company’s assets under management (AUM) have grown significantly, reaching approximately PKR 429 Billion as of December 2025, reflecting its strong market presence and consistent growth in Pakistan’s asset management industry.