Positive

⚡ Flash Summary

ABL Islamic Cash Fund (ABL-ICF) reported its financial results for the quarter ended September 30, 2025. The fund achieved an annualized return of 10.05% against a benchmark of 9.74%. AUM grew by 20.39% compared to the prior quarter, reaching PKR 16,864.52 million. The fund maintained a majority exposure to cash at 78.99%, with smaller allocations to short-term Sukuk and bank deposits. The Management Quality Rating (MQR) of ABL Asset Management Company (ABL AMC) is ‘AM1’ with a ‘Stable’ outlook.

📌 Key Takeaways

• 📈 ABL Islamic Cash Fund generated an annualized return of 10.05% against a benchmark return of 9.74%.
• 💰 AUMs clocked in at PKR 16,864.52 million at the end of September 2025, a 20.39% increase from June 2025’s PKR 14,008.18 million.
• 🏦 The fund’s asset allocation is heavily weighted in Cash (78.99%), followed by Short term Sukuk (9.07%) and Banks (9.58%).
• 📊 The Monetary Policy Committee (MPC) upheld the policy rate at 11.00% in July and September, marking three consecutive holds.
• ⚠️ Inflation trends exhibited volatility, with projections for September indicating a rebound to 5.1-7.0% YoY due to flood-induced supply disruptions.
• 🤝 The Islamic segment mirrored conventional trends, emphasizing Shariah-compliant instruments.
• ✅ M/s. A.F. Ferguson & Co. have been appointed as auditors for the year ending on June 30, 2026.
• ⭐ The Fund Stability Rating (FSR) for ABL Islamic Cash Fund (ABL ICF) is ‘AA+ (f)’.
• 🏆 The Management Quality Rating (MQR) of ABL Asset Management Company (ABL AMC) is ‘AM1’ with a ‘Stable’ outlook.
• 🌐 External buffers strengthened, with foreign exchange reserves reaching $19.79 billion by mid-September.
• 💼 Sukuk auctions were rescheduled amid market adjustments, underscoring sustained appetite for Shariah-compliant instruments.
• 💵 Net assets value per unit increased from 10.0171 to 10.0870.
• 💸 Bank balances increased to PKR 13,494.591 million from PKR 12,125.446 million.
• 📜 Investments increased to PKR 3,445.152 million from PKR 2,151.725 million.

🎯 Investment Thesis

ABL Islamic Cash Fund is a HOLD. Positive AUM growth and a good management quality rating are good signs. The heavy allocation to cash, while safe, limits upside. Inflation and market volatility could impact future returns. A more diversified investment portfolio, with more aggressive investment, could result in better profitablity.

⚡ 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.