Mutual funds in Pakistan: types, returns and halal options

A mutual fund pools many people’s money and a licensed asset management company (AMC) invests it in bank deposits, government debt, bonds or shares. In Pakistan these funds held Rs 4.66 trillion in August 2026, per MUFAP (Mutual Funds Association of Pakistan). About 49% of open-end fund assets were Shariah-compliant. Returns are not fixed: money market funds earned 10.53% a year that month, while equity funds returned 0.80% for the month.

What types of mutual funds are there in Pakistan?

Most types come in a conventional and a Shariah-compliant version. Each fund’s documents state its risk level, given as how much your principal (the money you put in) is at risk. The labels below are the ones one large AMC shows on its fund pages; check the label on the fund you’re considering.

These are past returns for one month. MUFAP says its annualised returns for debt funds and one-month returns for equity funds aren’t comparable. Its category returns are averages weighted by fund size, after fund expenses but before any sales load.

How do I invest in a mutual fund?

MUFAP’s August 2026 newsletter lists 25 member companies managing funds, mostly AMCs plus a few life insurers. It counted 812,693 digital accounts holding Rs 172 billion that month, so opening online is common. Overseas Pakistanis can invest through a Roshan Digital Account: MUFAP counted 18,994 such accounts. See investing through a Roshan Digital Account.

Are mutual funds in Pakistan halal or haram?

That is a religious judgement we can’t make for you. What we can say: Pakistan has a full set of Shariah-compliant categories (money market, income, equity, fixed return, pension). They held Rs 2.2 trillion in August 2026 against Rs 2.29 trillion in conventional open-end funds. SECP’s 2025 rule changes also tightened the Shariah compliance framework for these funds.

What fees do mutual funds charge?

Since 1 July 2025, SECP caps the yearly management fee, charged on the fund’s average net assets:

A sales load (a fee taken when you buy or sell units) can be charged if the fund’s offering document allows it. Since October 2022 it’s capped at 3% if you invest directly or through a third-party website, and 1.5% through the AMC’s own website. The AMC must tell you the load before you invest and send a breakup within 48 hours.

How much tax do I pay on mutual fund returns?

Rates as amended up to 30 June 2026:

The redemption rule in the Ordinance sets one 15% rate for all individuals; it has no separate rate for non-filers. No capital gains tax is deducted on units bought on or before 30 June 2024 and held more than six years.

Pension funds (VPS) work differently: salaried and business individuals get a tax credit on contributions of up to 20% of taxable income under section 63. The old tax credit for buying shares or fund units (section 62) was removed in 2022.

Which fund suits whom?

• Money you need within a year: money market funds are labelled low risk and earned 10.53% a year in August 2026. Compare with bank deposits, where profit is taxed at 20% for filers.
• Money for five years or more: equity funds carry high risk. In February 2026 they lost 9.78% in a single month.
• Retirement saving with a tax credit: VPS pension funds.

To buy shares yourself instead, see how to invest in PSX. For the tax rates above you need to be a filer: see filer vs non-filer.

More guides: investment options in Pakistan, national savings certificates, Investing.