⚡ Flash Summary

ABL Islamic Sovereign Fund (ABL ISSF) reported its unaudited financial results for the quarter ended September 30, 2025. The fund’s performance is influenced by Pakistan’s economic stabilization, with inflation trending lower and resilient remittances. The fund posted an annualized return of 10.25% against a benchmark return of 9.95%. The fund’s asset allocation majorly comprised of 90.12% in Government Guaranteed Securities and 6.29% as Cash.

📌 Key Takeaways

• 🇵🇰 Pakistan’s economy continues stabilization; inflation averages 4.2% YoY for the quarter.
• 💹 Large-scale manufacturing shows tentative recovery, LSM output rises 8.99% YoY in July 2025.
• ⚠️ Fiscal collections miss quarterly target by ~Rs 198-200 billion despite enforcement efforts.
• 💼 Mutual fund industry AUMs grow 7.81% YTD, rising from PKR 3,833 billion to PKR 4,132 billion.
• 💰 Islamic equity funds display strong growth, rising 27.3% from PKR 141 billion to PKR 180 billion.
• 🏦 SBP maintains policy rate at 11.0% throughout the quarter.
• 💵 SBP’s FX reserves stand at USD 14.4 billion as of September 22, 2025.
• 📈 ABL Islamic Sovereign Plan 1 posts an annualized return of 10.25% vs. 9.95% benchmark.
• 🛡️ Fund allocation: 90.12% in Government Guaranteed Securities, 6.29% in Cash.
• ✔️ The fund size clocked in at PKR 1,145.95 million as of September 2025.
• 🔍 Management quality rating (MQR) of ABL AMC affirmed at ‘AM1’ with ‘Stable’ outlook by PACRA.
• 🌐 Foreign exchange reserves reached $19.79 billion by mid-September.
• Sukuk auctions were rescheduled amid market adjustments.

🎯 Investment Thesis

Given the fund’s stable management, sound asset allocation, and positive returns exceeding the benchmark, a HOLD recommendation is warranted. However, keep a close watch on performance to be able to switch to a BUY signal. The current allocation is mostly into Government Guaranteed Securities, so any shift in focus to another asset class or cash might need to be looked at.