The assets under mutual funds grew significantly by 40 percent in July year-on-year due to attractive profit rates of over 22 percent.

According to the Mutual Funds Association of Pakistan (MUFAP), the total assets surged to an all-time high of Rs. 1.65 trillion as compared to Rs. 1.17 trillion reported in July 2022, showing an increase of Rs. 477 billion in overall mutual funds.

The outgoing month of July-23 remained phenomenal for equities as the benchmark KSE-100 Index rose by around 6,582 points, translating into a whopping 15.9 percent monthly return. It bears mentioning that this is the highest monthly return since April-20 when the market mounted by 16.7 percent post-COVID-19 slump.

During the period in review, assets under mutual funds reported an increase of Rs. 83 billion from Rs. 1.57 trillion in June 2023.

Funds under pension schemes increased to Rs. 51.9 billion from Rs. 40.7 billion. Similarly, the value of Exchange Traded Funds surged to Rs. 322 million from Rs. 171 million in the same period last year.

The high policy rate significantly increased the profit rate offered by various Asset Management Companies on mutual fund investments. As a result, substantial inflows have been reported, primarily into low-risk mutual funds such as income funds and money market funds.

In Pakistan, mutual fund investments have been on the upswing in recent months. It is projected that substantial inflows will continue as funds linked to the equities market fare well, which may draw short-term investment in funds linked to the equity market.

Source: Pro Pakistani