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Pakistani households’ propensity to invest has mostly followed a safe route into money markets; however, the fear of equity investments has always loomed large. The question here arises: why do Pakistani households fear equity?
Macroeconomic indicators such as GDP growth, rate of unemployment, interest rates, fiscal deficits, and exchange rate movements, along with the predominant impact of inflation and cultural preferences of safe investing in gold, real estate, and other safe instruments for capital preservation, all these variables have shaped investors’ behaviour patterns and how they perceive uncertainty, leading to the erosion of risk appetite. According to the Pakistan Bureau of Statistics, inflation was approximately 11 per cent in June 2026.
Data from the Association of Mutual Funds of Pakistan (MUAFP) reflects investors’ overwhelming preference for capital preservation over high-risk, high-reward opportunities, while equity funds have seen a small proportion of investment. (MUAFP) reveals that nearly 47pc of mutual fund investments are in conventional and Shariah-compliant money market instruments, while approximately 13pc are in the equity market.
