Sharia-compliant mutual funds in Pakistan have reached a historic milestone, with total assets under management (AUM) exceeding Rs2 trillion for the first time, according to data released by the Mutual Funds Association of Pakistan (MUFAP). The achievement reflects growing investor confidence in Islamic investment avenues across the country.
Assets managed by Islamic fund managers climbed to Rs2.1 trillion by the end of February 2026, marking a significant increase from Rs1.7 trillion recorded in the corresponding period last year. The sharp rise emphasizes sustained momentum in the sector, which had already surpassed the Rs1 trillion threshold by the close of 2024.
Industry Growth and Market Share
The broader mutual fund industry also posted notable growth. Total AUM across 24 asset management companies reached Rs4.35 trillion by February 2026. Conventional funds accounted for Rs2.25 trillion of this total, showing steady expansion alongside the Islamic segment.
Islamic mutual funds now represent a substantial portion of Pakistan’s asset management industry, capturing nearly half of total industry AUM. The continued expansion highlights increasing preference for Shariah-compliant financial products among a broad base of investors.
Investment Categories
Islamic mutual funds in Pakistan are structured across multiple categories, including:
- Open-ended funds – Flexible investment with daily liquidity
- Pension funds – Long-term retirement savings vehicles
- Exchange-traded funds (ETFs) – Tradable funds on the stock exchange
These funds invest in diverse asset classes such as equities, money market instruments, and income-generating securities, offering options ranging from equity and income funds to low-risk money market products. This variety allows investors to select products aligned with their risk tolerance and investment horizons.
Market Dynamics
Market participants note that mutual funds are gaining traction among investors seeking relatively stable returns with moderate risk, positioning them as a key savings and investment vehicle in Pakistan. Investor participation has also increased in related products, including voluntary pension schemes, employer-backed retirement plans, and ETFs, further supporting the sector’s upward trajectory.
Bank-sponsored asset management companies continue to maintain a dominant position in the market, leveraging extensive distribution networks and diversified investment platforms to attract a larger pool of investors.
Leading Players
| Asset Management Company | AUM (Rs billion) |
|---|---|
| Al Meezan Investment Management | 701 |
| NBP Fund Management | 551 |
| MCB Investment Management | 421 |
| UBL Fund Managers | 386 |
| HBL Asset Management | 358 |
| Alfalah Asset Management | 335 |
Al Meezan Investment Management remained at the forefront of the industry with assets under management of Rs701 billion, maintaining its position as the largest asset manager in Pakistan’s Islamic mutual fund space.
Structural Shift
The continued rise in Sharia-compliant investments signals a structural shift in Pakistan’s financial landscape, with Islamic funds increasingly capturing a larger share of the country’s growing asset management industry. This trend reflects both the deepening of Islamic finance infrastructure and broader investor preference for Shariah-compliant products.
About the Mutual Funds Association of Pakistan
The Mutual Funds Association of Pakistan (MUFAP) is the representative body of the asset management industry in Pakistan, promoting the development and growth of mutual funds and investment management services across the country.
