PACRA Maintains the Stability Rating of MCB Government Securities Fund

MCB Government Securities Fund ("MCB GSF" or "the Fund") is categorized under a medium-risk income scheme, with the objective of seeking the maximum possible rate of return by investing primarily in Government Securities. The Fund is designed for investors seeking income generation through sovereign debt instruments while accepting moderate exposure to interest rate risk. As of Mar'26, the Fund's Assets Under Management (AUM) stood at PKR 22,232mln, compared to PKR 48,562mln as of Sep'25 (the last review), reflecting a decline in fund size during the review period in line with investor reallocation trends and prevailing market dynamics within the income fund category. In terms of asset allocation, approximately 49% of the portfolio was invested in Pakistan Investment Bonds (PIBs), ~36% in Treasury Bills (T-Bills), and ~13% in cash and cash equivalents at end-Mar'26. The portfolio remained predominantly concentrated in Government Securities, reflecting the Fund's mandate and providing strong sovereign-backed credit quality. From a credit quality perspective, approximately 97% of the Fund's assets were invested in AAA-rated instruments, while ~1% was invested in AA+ rated avenues, with the remaining exposure comprising cash and other permissible investments. The Fund's overall credit profile remains strong and is considered fully compliant with PACRA's rating criteria, supported by its significant exposure to sovereign and highly rated instruments. The Fund's Weighted Average Maturity (WAM) stood at 584 days as of Mar'26. The elevated maturity profile reflects a moderate level of sensitivity to changes in interest rates, primarily attributable to the Fund's allocation in longer-tenor Pakistan Investment Bonds. While this may expose the Fund to mark-to-market volatility in the short term, it also positions the Fund to benefit from favorable interest rate movements over the investment horizon. In terms of performance, the Fund reported an annualized one-year return of negative 0.48% as of Mar'26 against its benchmark return of 10.83%. The underperformance was primarily driven by mark-to-market losses on longer-duration government securities amid fluctuations in market yields during the review period. Nevertheless, the Fund's investment strategy remains aligned with its mandate of investing predominantly in Government Securities, and performance is expected to remain linked to interest rate movements and sovereign debt market dynamics.
Going forward, any material changes in the Fund's investment policy, asset allocation strategy, credit quality profile, 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. It holds licenses for asset management, investment advisory, and pension fund management, catering to both Conventional and Shariah investment solutions. 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 535 Billion as of Apr'26, reflecting its strong market presence and consistent growth in Pakistan’s asset management industry.