Abstract:
This article examines the performance of Pakistan’s mutual fund
industry during 2006–10, a period characterized both by bullish and bearish
markets. An analysis of fund types reveals that Islamic funds have shown strong
growth in spite of their lackluster performance compared to conventional funds.
Income funds appear to have suffered as a consequence of the underdeveloped
bond market, and very high t-bill rates have resulted in negative excess returns
during the period. For stock funds, market indices and size are significant factors
that indicate a preference for large-cap stocks of managers. With consistently
negative or insignificant alphas, no fund manages to outperform the market.
