Mutual Funds Soar to Rs3.93T in Six Years

Islamabad, August 17, 2025, 04:11 PM PKT — Pakistan’s mutual fund industry has exploded nearly sevenfold over six years, soaring from Rs578 billion in 2019 to Rs3.93 trillion by June 2025, fueled by robust demand for conventional and Shariah-compliant investments, as per fresh data from the Securities and Exchange Commission of Pakistan (SECP). Conventional funds leapt 5.2 times to Rs2.206 trillion, while Shariah-compliant funds surged 6.7 times to Rs1.726 trillion, narrowing the gap with a 44% market share (up from 39% in 2019), reflecting a shift toward Islamic finance. Mutual fund deposits, peaking at Rs4.43 trillion in December 2024 from Rs2.70 trillion in June 2024, dropped over Rs500 billion by June 2025 due to a federal tax of up to 16% on banks with an advance-to-deposit ratio below 50%, prompting fund shifts that reversed post-deadline, per a senior SECP official.

The SECP is driving reforms via focus groups, prioritizing digital transformation, exchange-traded funds (ETFs), infrastructure- and ESG-based funds, systematic investment plans (SIPs) for retail investors, financial inclusion (especially for women), and stricter governance and transparency standards. Retail investors now hold 39.2% of Assets Under Management (AUMs) (up from 38% in 2019), while corporate share dips to 61% from 62%, with 768,769 individual and 6,361 corporate investors boosting capital market participation. Analysts credit low bank returns, rising literacy, and regulatory support, but warn of sustainability risks without innovation and oversight. Web context on financial growth shows past volatility, while posts found on X reflect optimism tempered by caution—some hail progress, others question stability. Critically, the narrative of “industry boom” may mask policy-induced swings—web data hints at external pressures, and X sentiment suggests distrust in long-term gains, pointing to potential challenges.