PACRA Maintains the Stability Rating of ABL Islamic Sovereign Fund

ABL Islamic Sovereign Fund ("ABL-ISF" or "the Fund") is categorized under a medium-risk profile, with the objective of providing competitive returns to investors through investment in Shariah compliant Government Securities, deposits, short-term sukuk, commercial paper, and money market instruments, while seeking maximum possible preservation of capital. As of Jun'26, the Fund's Assets Under Management (AUM) stood at PKR 296mln, compared to PKR 770mln as of the last review, reflecting a significant contraction in fund size during the review period. In terms of asset allocation, approximately 85% of the portfolio was invested in Government Guaranteed Securities, with ~13% in cash, and the remaining in others, reflecting a near-exclusively sovereign-oriented portfolio consistent with the Fund's Shariah compliant sovereign income mandate. From a credit quality perspective, approximately 88% of the Fund's assets were invested in Government Securities and AAA rated instruments, ~10% in AA+ rated avenues, ~0.2% in AA- rated instruments, ~0.2% in A+ rated instruments, and ~2% in unrated exposures. The overall credit profile is considered very strong and fully compliant with the assigned rating criteria, with the dominant sovereign allocation providing the highest possible quality anchor to the portfolio. The Fund's Weighted Average Maturity (WAM) stood at 848 days as of Jun'26, driven primarily by the Fund's significant allocation to longer-term Government Guaranteed Securities, reflecting high sensitivity to interest rate movements broadly consistent with the Fund's medium-risk Shariah compliant sovereign income mandate and its strategy of capturing competitive returns through longer-tenor sovereign instruments. Meanwhile, the unit holding pattern reflects a high degree of concentration, with the top 10 investors accounting for ~85% of the Fund's total holdings, including a ~24% sponsor holding and institutional investors and provident funds, all of which are typically sticky and long-term in nature, providing a degree of stability and resilience to the investor base. The Fund's dominant allocation to Government Guaranteed Securities, which are highly liquid and readily realisable, further reinforces its ability to meet any potential redemption requirements in a timely manner, providing adequate comfort despite the elevated concentration level. In terms of performance, the Fund delivered a one-year return of 7.41% as of Jun'26, against a benchmark return of 9.93%, reflecting an underperformance of approximately 252 basis points.
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
Incorporated in 2007, ABL AMC is a wholly owned subsidiary of Allied Bank Limited (ABL). ABL operates with 1,400 plus branches including 117 Islamic banking branches, 8 Digital/ Self Service branches & 2 overseas branches. ABL AMC possesses licenses for asset management, pension management and investment advisory services. As the leading private sector asset management and investment advisory Company in Pakistan, offerings include a comprehensive range of both Conventional and Shariah Compliant investment solutions across all major asset classes. Assets under management of the Company stood at ~PKR 306bln at the end of Jun'26