Size of Pakistan’s mutual fund industry grows 17% in December

Total assets under management (AUMs) of Pakistan’s mutual funds surged by 17% in December, reaching PKR 4.326 trillion from PKR 3.697 trillion in the previous month.

Al-Meezan retained its position as the largest asset management company (AMC) with AUMs of PKR 663 billion, a report issued by Spectrum Securities mentioned.

NBP Funds followed with PKR 503 billion, and MCB Investment Management secured third place with PKR 462 billion.

The total equity fund size, encompassing both conventional and Islamic funds, increased by 22% to PKR 386 billion in December, representing 8.9% of the total AUMs. Notably, the KSE-100 index rose by 13.6% during the month.

Shariah equity funds witnessed a notable 28% rise, reaching PKR 134 billion.

Profitability of the KSE-100 index registered a growth of 24% during FY24, highest profitability on fiscal year basis.

KSE-100 concluded the year 2024 closing above 115,000 points, taking annual returns to 84% for the year, highest annual return recorded in the past 22-years.

Despite impressive 84% gain in 2024, there is still potential for re-rating, supported by the ongoing monetary easing cycle, along with stability in inflation and the currency.

Conventional money market funds experienced a significant jump of 36% in December, growing to PKR 1.169 trillion from PKR 861 billion.

This category accounts for 27% of the total AUMs in the industry. MCB Cash Management Optimizer emerged as the largest fund in this category at PKR 140 billion, marking a 60% increase for the month.

NBP Money Market Fund is the second largest with PKR 134 billion, reflecting a 30% growth, while HBL Cash Fund ranks third with PKR 126 billion, showing a 38% increase.

Analysts attribute this surge to a shift of funds from bank deposits to money market funds, as banks adjusted their advance deposit ratios ahead of the December deadline.

Shariah-compliant money market funds also saw an 8% increase in December, growing to PKR 1.169 billion from PKR 738 billion, representing 17% of the total AUMs in the industry.

Alfalah Islamic Money Market Fund became the largest fund in this category at PKR 96 billion, following a 21% increase.

HBL Islamic Money Market Fund retained its position as the second-largest fund with PKR 93 billion, growing by 16%. Meezan Cash Fund, previously the largest in November, now ranks third at PKR 90 billion with a 7% increase.

Meanwhile, International Monetary Fund (IMF) has lowered the country’s growth estimate to 3% for current fiscal year, down from 3.2% it had projected about three months ago.