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 profile, with the objective of seeking the maximum possible rate of return through investment primarily in Government Securities. As of Sep’26, the Fund’s Assets Under Management (AUM) stood at PKR 13,972mln, compared to PKR 22,232mln as of Mar’26 (the last review), reflecting a contraction in fund size during the review period. In terms of asset allocation, approximately 43% of the portfolio was invested in cash, 40% in PIBs, ~11% in GoP Ijarah Sukuks, ~5% in Treasury Bills, and ~1% in other receivables, reflecting a predominantly sovereign portfolio complemented by a substantial cash allocation that provides a strong liquidity buffer. From a credit quality perspective, approximately 99% of the Fund’s assets were invested in Government Securities and AAA rated instruments, with the remaining ~1% in unrated exposures. The overall credit profile is considered very strong, with the near-exclusive allocation to sovereign and highest-grade instruments providing a strong quality anchor to the portfolio. The Fund’s Weighted Average Maturity (WAM) stood at 840 days as of Sep’26, driven primarily by the Fund’s significant allocation to longer-tenor PIBs, reflecting high sensitivity to interest rate movements broadly consistent with the Fund’s medium-risk sovereign income mandate. 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. While this exposes the Fund to elevated redemption pressure, the Fund’s substantial cash allocation of ~43% and its dominant holding of highly liquid, readily realisable Government Securities provide adequate comfort regarding its ability to meet any potential redemption requirements in a timely and orderly manner. In terms of performance, the Fund delivered a 365-day annualized return of 9.42% against a benchmark return of 11.01%, reflecting an underperformance of approximately 159 basis points. This gap is broadly attributable to the Fund’s longer-tenor PIB positioning in the context of the prevailing interest rate environment during the review period.
Going forward, material changes in the Fund's asset allocation strategy, impacting its credit quality and/or exposure to interest rate risk, would affect 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 426 Billion as of Sep'26, reflecting its strong market presence and consistent growth in Pakistan’s asset management industry.