Pakistan's mutual fund sector experienced slower asset expansion during 2026, reaching Rs. 4.72 trillion by the close of September. This marked a 12.4 percent increase year-over-year, showing a weaker pace compared to the prior two years.

Figures published by the Mutual Funds Association of Pakistan show that total assets grew by Rs. 520 billion, moving up from Rs. 4.20 trillion in September 2025.

This growth was much smaller than the Rs. 1.15 trillion gain recorded between September 2024 and September 2025, when the asset base moved from Rs. 3.05 trillion to Rs. 4.20 trillion.

An even bigger expansion of Rs. 1.23 trillion took place between September 2023 and September 2024, pushing overall assets upward from Rs. 1.82 trillion to Rs. 3.05 trillion.

While recent data points to a cooling in asset accumulation, the total investment pool of the sector continues to grow.

Money Market and Equity Funds Face Pressure

Negative growth persisted across money market and equity funds, the report states. Numerous investors kept cashing out dividends, which also slowed down the increase in total asset values managed by fund companies.

Mutual fund yields climbed as high as 10 percent per month, delivering heavy earnings for participants with larger capital placements, according to the findings.

Banks and Government Securities Dominate Investments

Data from MUFAP indicates that asset management companies placed the bulk of their funds into bank and development finance institution deposits along with other financial instruments.

Such holdings totaled roughly Rs. 2.74 trillion, making up 58 percent of the sector's aggregate assets.

Government bonds and related securities made up about 17 percent, equating to Rs. 795 billion, while stock market holdings reached Rs. 677 billion, or roughly 14 percent of the aggregate. Placements in alternative channels totaled Rs. 567 billion, which is about 12 percent.

This allocation highlights heavy reliance on banking instruments and state securities, alongside a smaller allocation toward equities.

Individual Investors Hold 43% of Mutual Fund Assets

The investor category designated as others commanded the biggest portion of placements at Rs. 2.19 trillion, translating to nearly 46.3 percent of aggregate assets.

Retail investors accounted for Rs. 2.04 trillion, making up 43.2 percent of the industry's holdings.

Commercial banks and financial institutions held Rs. 129.15 billion, whereas provident funds totaled Rs. 165.07 billion. Pension schemes recorded placements of Rs. 154.75 billion, and gratuity funds totaled Rs. 44.62 billion.

Open-end funds led the market with assets totaling Rs. 4.55 trillion. Voluntary Pension Schemes represented Rs. 155.49 billion, while employer-managed pension funds reached Rs. 7.41 billion. Exchange-traded funds stayed a minor sector, holding Rs. 6.94 billion.

Asset management firms manage 25 primary funds spanning money markets, stocks, government paper, and retirement portfolios, MUFAP reports.