Pakistan’s mutual fund sector has expanded nearly sevenfold in six years, with total assets under management (AUMs) reaching Rs3.93 trillion by June 2025, up from Rs578 billion in 2019. This sharp growth reflects rising investor confidence in both conventional and Shariah-compliant investment options.
Conventional mutual funds have grown 5.2 times to Rs2.206 trillion, while Islamic funds have increased 6.7 times to Rs1.726 trillion. Shariah-compliant products now make up 44% of the industry, up from 39% in 2019, highlighting growing demand for Islamic financial solutions.
However, the industry saw a drop from its all-time high of Rs4.43 trillion in December 2024. By June 2025, AUMs declined by over Rs500 billion. Officials say this was largely due to a temporary shift in banking deposits following new federal tax policies.
To meet a mandated advance-to-deposit ratio, banks had encouraged clients to move funds into mutual funds before December 2024. Once the target was met, much of this money returned to the banking sector, causing a 10% decline in mutual fund assets over six months.
Despite this fluctuation, retail investor participation has grown steadily. Retail investors now hold 39.2% of total AUMs, compared to 38% in 2019, while corporate investors account for 61%. The number of individual investors has reached 768,769, showing increasing public engagement in capital markets.
Looking ahead, the Securities and Exchange Commission of Pakistan (SECP) plans major reforms, including digitalisation, the launch of ETFs, and sustainable investment products. These changes aim to expand accessibility, strengthen governance, and boost long-term investor trust across Pakistan’s growing financial ecosystem.