Fund Ranking

vis.com.pk 1 VIS Credit Rating Company Limited VIS Credit Rating Company Limited Fund Ranking NOVEMBER 2025 FUND RANKING VIS Credit Rating Company Limited

vis.com.pk 2 VIS Credit Rating Company Limited VIS Credit Rating Company Limited Fund Ranking NOVEMBER 2025
Table of Contents
SUMMARY OF CRITERIA CHANGES ..........................................................................................................................................3
SCOPE OF CRITERIA..........................................................................................................................................................................3
CALCULATION METHODOLOGY................................................................................................................................................4
THE OUTCOME....................................................................................................................................................................................5
UNSOLICITED RANKING.................................................................................................................................................................6

vis.com.pk 3 VIS Credit Rating Company Limited VIS Credit Rating Company Limited Fund Ranking NOVEMBER 2025 SUMMARY OF CRITERIA CHANGES The Fund Ranking Methodology dated May 2024 has been reviewed, and the fundamental criteria outlined therein remain unchanged. SCOPE OF CRITERIA VIS' introduction of "Star Rankings" in the Pakistan market in 2004 paved the way for meaningful analysis of performance of mutual funds. The Star Rankings are based on a pure quantitative model, comparing historical risk-adjusted returns of funds invested in largely the same asset class. This tool has been designed to enable investors to evaluate the past performance of a given fund in relation to its peer group. The first step in this process is thus defining peer groups. VIS' categorization criteria is based on the fundamental principle that funds in a given peer group should be valid substitutes for one another; the difference in performance of funds would thus be a function of fund manager skill rather than external factors. Accordingly, at the most basic level, open-end funds are distinguished from closed-end funds due to their varying dynamics. Different categories of funds may also be created for different markets, such as domestic and international or as per their faith-based strategies such as conventional or Sharra compliant investments. Furthermore, mutual funds are classified into various categories on the basis of their average asset allocation and the size of total assets under management over the performance period. Funds in any of the category may also be further sub-categorized based on their size. Cut off thresholds for this sub￾categorization, however, varies from time-to-time with changes that occur in total size of the respective market. When necessitated by changes in fund composition, VIS changes classification accordingly. Broad classifications include:

• Stock Funds
• Asset Allocation Funds
• Balanced Funds
• Income Funds
• Money Market Funds
  For ranking of funds, it is important to ensure that categories are appropriately populated. With growth in number of funds over time, most of the basic categories have become adequately populated; some having enough data points for sub-categorization as well. For instance, based on their investing style and portfolio composition, funds may also be categorized as conservative, moderate or aggressive. Funds specializing in specific types of issues may also be distinguished. VIS continues to require a minimum of three funds per category operating for a minimum period of one year. There may still be some categories that feature less than desired number of funds to arrive at a full spread of rankings. This consideration at times necessitates 'clubbing together' of funds on a broader basis of asset class concentration in any fund. This consideration has also led to the development of hypothetical pools of funds, which may be readily replicated by investors. The objective remains provision of meaningful analysis of performance of funds, some of which may be unique in nature and may not have readily available substitutes currently in the market.

vis.com.pk 4 VIS Credit Rating Company Limited VIS Credit Rating Company Limited Fund Ranking NOVEMBER 2025 CALCULATION METHODOLOGY Change in the fund's net asset value (NAV) during the performance review period is used to gauge the returns earned by the investor, assuming that the dividends earned during the period are reinvested in the fund. For open-end funds, returns are automatically adjusted for sales load by taking the offer and redemption prices at the start and end of the investment period, respectively. For closed-end funds, returns are based on NAV rather than secondary market prices of the funds. VIS calculates a fund's total return for a given period as follows:
Next, VIS adjusts the fund's return for the risk-free rate. Once the excess return of each fund has been calculated, the relative return is arrived at by comparing the return of an individual fund with the peer group average. VIS fund performance rankings are based on risk adjusted performance. Traditional risk frameworks that rely on standard deviation generally assume that returns conform to a normal bell-shaped curve. An underlying assumption of the normal curve is 'perfect symmetry' which implies that the frequency and magnitude of upside price movements are considered just as "risky" as downside movements. Consequently, traditional models treat all uncertainty as risk, regardless of direction. In the practical world, investors worry more about their losses as they are generally risk-averse. For this very reason, VIS emphasizes downside risk when calculating the risk-adjusted returns. For arriving at the risk measure, VIS calculates monthly downside deviation relative to the risk-free rate. An average of all monthly negative returns for the full period under consideration gives the downside risk score of each fund. Akin to the calculation of relative return, the relative risk measure of each fund is a result of an individual fund's risk score compared to the peer average. Beginning of Period Pb Beginning of period NAV per unit; offer price in case of open-end fund 25.00 Ub Total no. of Units held 10,000 Vb Investment Value at beginning of period (Ub x Pb) 250,000 At time i Di Per unit distribution at time i 1.25 Ni NAV per unit for reinvestment at time i 22.50 Additional Units (Ub x Di) / Ni 560 Ui Total no. of Units held 10,556 Vi Investment Value at time i (Ui x Ni) 237,500 End of Period Pe End of period NAV per unit; redemption price in case of open-end fund 27.50 Ue Total no. of Units held 10,556 Ve Investment Value at end of peroid (Ue x Pe) 290,278 Total Return (Ve / Vb) – 1 % 16.11%

vis.com.pk 5 VIS Credit Rating Company Limited VIS Credit Rating Company Limited Fund Ranking NOVEMBER 2025 Changes in NAV are expected to reflect concentration related risks that the fund may be exposed to. However, changes in counterparty risk may not be reflected in prices unless tracked over a long period of time and even then, only prices of listed investments may satisfactorily reflect adjustments to counterparty risk. Therefore, adjustment for varying level of credit risk in case of income funds is made to the score. THE OUTCOME A minimum performance history of 1 year is required for funds to become eligible for ranking. VIS rankings are assigned as per the distribution below; the greater the number of funds in a category, the ranking distribution will more closely approximate a bell curve:
Top 10 and bottom 10 percentiles of the overall scores are assigned rankings of MFR-5(s) and MFR-1(s) respectively, while the middle 35 percentile is assigned MFR-3(s) rank. The remaining 22.5 percent on the upper and lower side are assigned MFR-4(s) and MFR-2(s) rank, respectively. VIS calculates fund performance rankings for the one-, two-, three-, and five-year periods with different weights assigned to sub-periods. However, 2-year ranking is only published in cases where a fund has not completed 3 years of operations. The weights assigned to rankings of different periods are:
Rating Horizon Weights
1-year 100% 1-year ranking
2-year
60% 2-year ranking
40% 1-year ranking
3-year
50% 3-year ranking
30% 2-year ranking
20% 1-year ranking
5-year
50% 5-year ranking
30% 3-year ranking
20% 1-year ranking

vis.com.pk 6 VIS Credit Rating Company Limited VIS Credit Rating Company Limited Fund Ranking NOVEMBER 2025 UNSOLICITED RANKING In order to provide useful benchmarks to market participants, VIS may also announce unsolicited performance rankings for other market players as well. These will be based on the following scale:

• Top 22.5% - High Rank
• Next 55% - Medium Rank
• Last 22.5% - Low Rank

vis.com.pk 7 VIS Credit Rating Company Limited VIS Credit Rating Company Limited Fund Ranking NOVEMBER 2025 Islamic International Rating Agency – Bahrain – iira.com Credit Rating Information & Services Ltd. – Bangladesh – crislbd.com Japan Credit Rating Agency, Ltd. - Japan China Chengxin International Credit Rating Company Limited - China 128/C, 25th Lane off Khayaban-e-Ittehad, Phase VII, DHA, Karachi Tel: (92-21) 35311861-64 431, Block-Q, Commercial Area, Phase-II, D.H.A. Lahore - Cantt. Tel: (92-42) 35723411-13 www.vis.com.pk info@vis.com.pk VIS Credit Rating Company Ltd. Information herein was obtained from sources believed to be accurate and reliable; however, VIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. Rating is an opinion on credit quality only and is not a recommendation to buy or sell any securities. Copyright VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS. DISCLAIMER