Pakistan's Mutual Fund Industry Expands Sevenfold, Shariah-Compliant Funds Rise to 44%

Strategic Insights -

Pakistan's mutual fund industry has experienced a significant expansion, with total assets growing from Rs578 billion in 2019 to Rs3.93 trillion by June 2025. This nearly sevenfold increase is attributed to strong growth in both conventional and Shariah-compliant investments. Conventional funds rose 5.2 times to Rs2.206 trillion, while Shariah-compliant funds surged 6.7 times to Rs1.726 trillion, narrowing the market share gap. Shariah-compliant products now account for 44% of the industry, up from 39% in 2019, reflecting a rising investor preference for Islamic finance.

Key Takeaways:

  • The SECP reports that Pakistan's mutual fund industry has expanded nearly sevenfold in six years, with total assets climbing to Rs3.93 trillion by June 2025 from Rs578 billion in 2019.
  • Conventional funds rose 5.2 times to Rs2.206 trillion, while Shariah-compliant funds surged 6.7 times to Rs1.726 trillion, with Shariah-compliant products accounting for 44% of the industry.
  • Shariah-compliant product share rose to 44% in 2025 from 39% in 2019, indicating a growing preference for Islamic finance among investors.
  • Mutual fund deposits fell by more than half a trillion rupees to Rs3.93 trillion in June 2025, attributed to the federal government's tax announcement.
  • The SECP is planning reforms to digitalize mutual funds, introduce ETFs, and launch infrastructure and ESG-based funds to tap sustainable investment demand.
  • Market analysts suggest that sustaining momentum will require innovation, wider accessibility, and robust oversight.
  • The SECP's reform agenda aims to deepen capital markets and channel more domestic savings into productive investments, supporting Pakistan's economic development goals.

Statistics:

  • Conventional funds rose 5.2 times to Rs2.206 trillion between 2019 and June 2025.
  • Shariah-compliant funds surged 6.7 times to Rs1.726 trillion between 2019 and June 2025.
  • Shariah-compliant product share rose to 44% in 2025 from 39% in 2019.
  • Mutual fund deposits fell by more than half a trillion rupees to Rs3.93 trillion in June 2025.
  • Retail investors hold 39.2% of Pakistan's total AUMs in 2025, up from 38% in 2019.
  • Total Assets Under Management (AUMs) grew from Rs578 billion in 2019 to Rs3.93 trillion by June 2025.

Sources:

  • Securities and Exchange Commission of Pakistan (SECP)
  • SECP data from June 2025
  • SECP's focus group sessions with industry stakeholders
  • Market analysts' comments