AsiaNet-Pakistan Premier Editorial Content and Press Release Distribution Service
Lahore: The Pakistan Credit Rating Agency Limited (PACRA) has announced an upgrade in the stability rating of the MCB Government Securities Fund, elevating it from AA- to AA. The fund, characterized by its moderate risk profile, is tailored for investors seeking stability through government-backed instruments.
Launched in November 2024, the MCB Government Securities Plan I, the fund’s sole allocation plan, aims to maximize returns by primarily investing in government securities. By June 2025, the plan reported assets under management (AUM) totaling PKR 38,606 million. The portfolio is significantly sovereign-heavy, with approximately 66.9% of its investments in floating-rate Pakistan Investment Bonds (PIBs) and 25.3% in cash placements with banks.
In terms of credit quality, the fund’s exposure is approximately 73.4% sovereign/AAA-equivalent, 25.3% with an AA+ rated commercial bank, and 1.3% in non-rated receivables. The weighted average maturity of the fund stands at 1241 days, influenced by its PIB holdings. The management has indicated that evolving calculation mechanisms will better reflect the bonds’ pricing structure.
Despite the portfolio’s concentration—where the top ten investors constitute about 64.8% of net assets—comfort is drawn from a significant affiliate-linked share. This affiliation, accounting for 60% of the net assets, provides stability and mitigates risks associated with large-ticket redemptions.
Since its inception, the plan has delivered an annualized return of approximately 12.58%, surpassing the benchmark return of about 11.77%. As of June 2025, this translates into a year-to-date return of 8.37%. The fund has maintained a consistent volatility level of 0.6%, aligning with its conservative investment approach.
PACRA notes that any substantive changes in the fund’s investment policy or compliance with rating criteria could impact the current rating.