With financial literacy becoming more and more common these days, Pakistanis are getting more and more interested in investments and long-term wealth building. As a result, mutual funds are emerging in the public eye mainly because they are the most accessible and reliable investment tool.
With inflation biting deeper and traditional savings accounts offering minimal returns, more and more Pakistanis are exploring mutual funds to grow their money steadily — and sensibly. But with dozens of funds available, managed by numerous Asset Management Companies (AMCs), the real question is: Which are the best mutual funds in Pakistan to invest in right now?
What is a Mutual Fund?
Before we dig deep into the best mutual funds available in Pakistan, let’s first understand what even is a mutual fund. Getting the basics right will make it easier to get the investments right.
A mutual fund is a pool of money in which many investors (individuals, corporations etc.) invest in stocks, bonds, money market instruments, or a mix of these. These funds are managed by professionals who aim to generate returns in line with the fund’s goals — be it capital growth, income, or stability. Basically, people invest a certain amount of money and the AMC’s (asset management companies) decide the allocation of these funds as per the risk tolerance of the investors.
The Mutual Fund Landscape in Pakistan
Pakistan’s mutual fund industry is regulated by the Securities and Exchange Commission of Pakistan (SECP) and has grown significantly in the last decade. According to data from the Mutual Funds Association of Pakistan (MUFAP), assets under management (AUMs) have crossed PKR 1.5 trillion — a strong indicator of investor confidence.
Mutual funds have stood out the most in a Pakistan due to it’s economic benefit. These funds are really beneficial for troubled economy like that of Pakistan. Our economy is an import based economy with the outflow of money being very high. However, when mutual funds come into the scene, the circulation of money remains within the country and as a result the GDP increases.
How to Invest in Mutual Funds in Pakistan – Quick Steps
For those who are a total beginner or just looking to switch from fixed deposits or prize bonds to something with better returns, here are all the basic steps to invest in mutual funds.
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Set Investment Goals: Decide if you want growth, income, or stability.
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Choose a Reputable AMC: Pick a licensed Asset Management Company (e.g., UBL, Meezan, HBL).
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Complete KYC Registration: Submit your CNIC, proof of income, and other documents via KYC (know your client organisation).
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Select the Right Fund: Based on your risk tolerance and goals (equity, income, Islamic, etc.).
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Invest Online or Offline: Use AMC apps/websites or visit a branch to invest.
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Track Investments: Monitor fund performance via monthly statements or online dashboards.
Important Tips Before Starting
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Always compare fund performance on MUFAP’s website
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Don’t chase returns and instead choose based on your risk profile
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Consider starting a Systematic Investment Plan (SIP). This is a small monthly investments that build wealth over time.
Comparison of Mutual Funds in Pakistan
Now let’s compare some mutual funds offered by leading Pakistani banks.
Note: There are two types of funds in Pakistan- Shariah Compliant and Non-Shariah Compliant.
| Bank | Fund Name | Fund Type | Risk Level | Return Potential | Best For | Shariah-Compliant? |
|---|---|---|---|---|---|---|
| UBL Fund Managers | UBL Stock Advantage Fund | Equity Fund | High | High (long-term growth) | Investors seeking high returns and willing to take risks | No |
| UBL Fund Managers | UBL Liquidity Plus Fund | Money Market Fund | Low | Low (steady and safe) | Conservative investors looking for liquidity | No |
| UBL Fund Managers | UBL Islamic Savings Fund | Islamic Fund | Medium | Moderate (halal income) | Investors seeking Shariah-compliant options | Yes |
| HBL Asset Management | HBL Growth Fund | Equity Fund | High | High (long-term gains) | Aggressive investors looking for capital appreciation | No |
| HBL Asset Management | HBL Money Market Fund | Money Market Fund | Low | Low (stable and liquid) | Risk-averse investors who need high liquidity | No |
| HBL Asset Management | HBL Islamic Equity Fund | Islamic Equity Fund | High | High (halal growth) | Investors looking for high growth in Shariah-compliant stocks | Yes |
| MCB Arif Habib | MCB Pakistan Stock Market Fund | Equity Fund | High | High (long-term growth) | Long-term investors willing to take high risk | No |
| MCB Arif Habib | MCB Cash Management Optimizer | Money Market Fund | Low | Low (stable) | Investors looking for safe, short-term investments | No |
| MCB Arif Habib | MCB Islamic Income Fund | Islamic Fund | Medium | Moderate | Investors looking for halal, low-risk options | Yes |
| Meezan Bank | Meezan Islamic Fund | Islamic Equity Fund | High | High (long-term growth) | Investors seeking halal high-growth investments | Yes |
| Meezan Bank | Meezan Cash Fund | Money Market Fund | Low | Low (stable and safe) | Conservative halal investors | Yes |
| Meezan Bank | Meezan Sovereign Fund | Balanced Fund | Medium | Moderate | Investors seeking halal income with moderate risk | Yes |
| Faysal Bank | Faysal Stock Fund | Equity Fund | High | High | Aggressive investors seeking long-term growth | No |
| Faysal Bank | Faysal Money Market Fund | Money Market Fund | Low | Low (stable and safe) | Conservative investors looking for security | No |
| Faysal Bank | Faysal Islamic Savings Growth Fund | Islamic Fund | Medium | Moderate | Halal investors looking for a balance of growth and safety | Yes |
Best Mutual Funds in Pakistan: Most Trustworthy Picks
Once the concept of mutual funds is clear, we now move to the most important part: the best mutual funds out there. Here are our top picks based on performance, stability, fund manager credibility, and investor trust:
1. UBL Stock Advantage Fund (USF)
Category: Equity Fund
Why it stands out: UBL’s USF has consistently ranked among the top-performing equity funds in Pakistan. It’s aggressive, yes, but for investors with a higher risk appetite, its long-term returns have beaten many benchmarks. The fund’s exposure to large-cap stocks gives it a strong backbone, especially during bullish trends on the PSX.
Ideal for: Long-term investors seeking capital appreciation.
2. Meezan Islamic Fund (MIF)
Category: Shariah-Compliant Balanced Fund
Why it stands out: MIF is a go-to for those looking for halal investment options. It offers a balanced exposure to equities and fixed-income Islamic instruments, giving decent returns with a relatively lower risk. Al Meezan is also one of the oldest and most trusted players in Pakistan’s Islamic finance space.
Ideal for: Investors seeking halal, diversified returns with moderate risk.
3. MCB Arif Habib Savings & Investments – Pakistan Income Fund (PIF)
Category: Income Funds
Why it stands out: If you’re looking for a more conservative option, PIF is a solid pick. It invests in low-risk instruments like government securities, TFCs, and bank deposits. It doesn’t offer explosive growth, but it’s a haven for risk-averse investors.
Ideal for: Retirees or conservative investors looking for a stable income.
4. HBL Islamic Stock Fund (HISF)
Category: Islamic Equity Fund
Why it stands out: Another Shariah-compliant option, HISF is managed by one of Pakistan’s most reputable financial institutions. It invests in halal stocks listed on the Pakistan Stock Exchange and has shown resilience even in volatile markets.
Ideal for: Faith-conscious investors wanting growth through equities.
5. Faysal Asset Allocation Fund (FAAF)
Category: Asset Allocation Fund
Why it stands out: FAAF dynamically adjusts its exposure between equities and fixed income depending on market conditions. This flexibility gives it an edge during uncertain times, like election years or economic downturns — something Pakistan knows all too well.
Ideal for: Those who want a managed balance between growth and safety.
Things to Consider: Choosing the Right Mutual Fund
When selecting a mutual fund in Pakistan, people must first consider the following factors:
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Investment goals (growth, income, capital preservation)
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Risk tolerance; the capacity to take risks
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Time horizon of goals (short-term vs. long-term)
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Fund manager reputation
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Historical performance of the funds (though past performance is not a guarantee, it’s still a useful indicator)
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What You Should Know Before Hand: Fees and Taxes
Most mutual funds in Pakistan charge a management fee (typically 1.5%–2%) and may have front-end or back-end loads. Additionally, gains are subject to Capital Gains Tax (CGT) but the rate of this tax will depend on your holding period and whether you’re a filer or non-filer.
| Tip: Always invest through official channels, and register with the Centralized KYC Organization (CKO) for transparency and easier access to different funds. |
Starting Small and Thinking Big
Mutual funds are not just for the wealthy. In fact investment in these funds can be as little as: PKR 500 to PKR 5,000 (depending on the fund). And there is no need for a brokerage account or a huge lump sum. Moreover, with low entry barriers and professional management, they’re one of the best ways for average Pakistanis to start investing and build long-term wealth. It’s just the game of consistency and patience.
So take that first step today — your future self will thank you.
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