⚡ Flash Summary

ABL Islamic Dedicated Stock Fund (ABL-IDSF) reported its quarterly financial statements for the period ended September 30, 2025. The fund posted a return of 29.18%, underperforming its benchmark return of 33.20%. The fund’s AUM increased by 7.69% to PKR 141.84 million compared to PKR 131.71 million as of June 30, 2025. At the end of the period, 93.99% of the fund was invested in equities.

📌 Key Takeaways

• 📈 Fund’s AUM increased by 7.69% to PKR 141.84 million from June 30, 2025.
• 📉 Underperformed benchmark with a return of 29.18% against 33.20%.
• 💰 Fund was 93.99% invested in equities at quarter’s end.
• 🇵🇰 Pakistan’s economy showed signs of stabilization with inflation averaging 4.2% YoY.
• 📊 Large-scale manufacturing offered tentative recovery signs, with July 2025 output rising 8.99% YoY.
• ⚠️ Fiscal performance fell short of expectations, with a revenue gap of ~Rs 198-200 billion.
• 🌎 External account remained sensitive, with workers’ remittances providing a crucial cushion.
• ✅ Market sentiment improved due to sovereign rating upgrades and debt management.
• 🔍 KMI-30 index saw a rally, rising 33.2% QoQ.
• 💸 Mutual Funds showed strong local buying, absorbing foreign outflows.
• 🏢 AUMs in the mutual fund industry increased by 7.81% in the first two months of FY26.
• ⭐ PACRA maintained ABL AMC’s management quality rating at ‘AM1’ with a ‘stable’ outlook.
• 🌪️ Recent devastating floods across the country have contributed to a rise in inflation.
• ⚡ Positive momentum in the market is anticipated, supported by foreign investment inflows.

🎯 Investment Thesis

HOLD. The ABL Islamic Dedicated Stock Fund’s underperformance against its benchmark raises concerns about its investment strategy and stock selection process. Despite the AUM growth and positive macroeconomic factors, the fund’s inability to deliver competitive returns warrants a cautious approach. Given these factors, a HOLD recommendation is appropriate. More research needed. I would set the price target at 15.5 with a time horizon of medium-term to long-term.