Economic Fluctuations and Mutual Fund Performance in Pakistan: A Comprehensive Analysis Including the COVID-19 Period

Abstract

This study delves into a decade-long analysis of mutual fund performance in Pakistan, spanning from July 2012 to June 2022. It encompasses the role of macroeconomic determinants on performance of mutual funds (i.e., Shariah-compliant and conventional funds). The objective is to provide precise insights for investors and fund managers, enhancing their ability to navigate the complex mutual fund landscape. Our empirical investigation unearths macroeconomic factors affecting mutual funds. Factors such as Gross Domestic Product (GDP), inflation, and the disruptive influence of the COVID-19 pandemic have presented formidable challenges. Conversely, the study identifies resilience in mutual fund performance linked to population trends, the KSE100 index's enduring strength, worker remittances, fiscal policy effectiveness, and trade prosperity. Importantly, these patterns hold true for both Shariah-compliant and conventional mutual funds, underlining their consistency across a range of performance metrics. Our findings offer invaluable guidance for investors and contributes to the decision-making toolkit and empowering them with actionable insights.