AsiaNet-Pakistan Premier Editorial Content and Press Release Distribution Service
Karachi: In a recent announcement, The Pakistan Credit Rating Agency Limited (PACRA) upheld the stability rating of the ABL Islamic Sovereign Fund (ABL ISF), noting the fund’s continued adherence to its medium-risk strategy. Despite its strong performance, concerns over potential redemption pressures loom large.
The ABL ISF, which emphasizes capital preservation alongside competitive returns, has maintained a diversified asset allocation to balance income generation with portfolio stability. As of June 30, 2025, the Fund’s portfolio was heavily weighted towards Sukuks, accounting for approximately 52%. Complementary allocations were made in cash placements and government-backed exposures, rounding out the portfolio with other Shariah-compliant investments.
Credit quality remains a focal point for ABL ISF, with a substantial 54% of assets invested in government securities and AAA-rated investments forming the backbone of the portfolio. Additional investments include 24% in A+ rated instruments and a minimal 0.01% in AA-rated avenues. However, the portfolio’s weighted average maturity of 899 days indicates significant exposure to credit and interest rate fluctuations.
A pressing issue identified by PACRA is the high investor concentration within the fund. The top ten investors collectively hold about 95% of the total assets, which could pose significant redemption risks should substantial withdrawals occur. This concentration underscores the potential vulnerability of the Fund to sudden liquidity demands.
Looking ahead, PACRA emphasizes that any significant shifts in investment policy or deviations from the established rating criteria could influence the Fund’s stability rating. As the financial landscape evolves, ABL ISF’s ability to navigate these challenges will be crucial in maintaining investor confidence.