PACRA Upholds Stability Rating for Alhamra Islamic Income Fund

Karachi: The Pakistan Credit Rating Agency Limited (PACRA) has maintained the stability rating of Alhamra Islamic Income Fund, underscoring its medium-risk profile and commitment to generating risk-adjusted returns through Shariah-compliant investments.

As of June 2025, the fund’s Assets Under Management (AUM) stood at PKR 42.78 billion, down from PKR 68.96 billion in December 2024. This decrease was mainly due to redemptions by institutional participants in response to changing liquidity conditions. Despite this decline, the fund continues to hold a strong position within Pakistan’s Shariah-compliant income fund sector.

The fund’s asset allocation included 55.0% in cash placements, 41.4% in Government of Pakistan Ijara Sukuks, 1.3% in other privately placed Sukuks, 1.4% in various other assets such as receivables, and 0.9% in government-backed or guaranteed securities. This allocation strategy reflects a defensive posture in light of evolving interest rate expectations, while sovereign Sukuk holdings provide stability to the portfolio.

In terms of credit quality, 42.8% of the fund’s assets are invested in Government/AAA-rated instruments, 48.7% in AA/A1-rated avenues, with the remaining portions allocated to A+ rated and other instruments. This composition highlights the fund’s adherence to prudent credit selection and compliance with Shariah investment principles.

The fund’s Weighted Average Maturity (WAM) was recorded at 402 days as of June 2025, indicating a moderate sensitivity to credit and rate changes. The duration strategy aims to maintain flexibility while capturing opportunities in the mid-tenor segment of the Islamic yield curve.

The fund’s approach balances liquidity management with yield optimization within a stabilizing macroeconomic landscape. PACRA notes that any significant changes in investment policy or rating criteria compliance could influence the fund’s stability rating in the future.