Al Meezan runs three ways to own a basket of Shariah-compliant Pakistani shares. Meezan Islamic Fund (MIF) is the actively managed open-end fund, with a 3.00% management fee and a 3.96% total expense ratio. KSE Meezan Index Fund (KMIF) tracks the KMI-30 for a 0.75% fee and a 1.27% expense ratio. Meezan Pakistan ETF (MZNPETF) trades on the PSX, charges 0.50% and runs at a 0.96% expense ratio, but tracks Al Meezan's own Meezan Pakistan Index rather than the KMI-30. Over the year to 31 August 2026 the ETF returned 20.44%, KMIF 17.46% and MIF 13.06%, against 18.50% for the KMI-30. The right choice depends on whether you pay for stock picking, and on how you want to buy and sell.
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Three structures from the same manager
All three products are managed by Al Meezan Investment Management, Pakistan's largest Islamic asset manager, rated AM1 by PACRA (15 May 2026) and VIS (22 January 2026), with the Central Depository Company as trustee and A.F. Ferguson as auditor. The Shariah advisor for each is Dr Muhammad Imran Ashraf Usmani, SECP registration SECP/IFD/SA/005. Where they differ is in the wrapper, and the wrapper decides how much you pay, how closely you follow the market and how you get in and out. Our Al Meezan investments guide covers the house; this page decides between its three equity routes.
- Meezan Islamic Fund (MIF): open-end, actively managed equity fund launched 8 August 2003, benchmark KMI-30, net assets Rs 65.93 billion at 31 August 2026, NAV Rs 164.83.
- KSE Meezan Index Fund (KMIF): open-end index tracker launched 23 May 2012, benchmark KMI-30, net assets Rs 8.19 billion, NAV Rs 180.34.
- Meezan Pakistan Exchange Traded Fund (MZNPETF, PSX ticker MZNP-ETF): listed ETF launched 5 October 2020, benchmark Meezan Pakistan Index (MZNPI), net assets Rs 2.44 billion, NAV Rs 17.90.
The size gap matters for liquidity in one direction only. MIF and KMIF are open-end, so Al Meezan creates and cancels units at NAV every dealing day and size is irrelevant to your ability to exit. The ETF is bought and sold on the exchange, so you depend on the authorised participants (JS Global, Adam Securities and MRA Securities, per the FMR) to keep the market price close to NAV, and on there being a buyer when you want to sell.
Fees and expense ratios from the August 2026 FMR
The fund manager's report for August 2026 states each fund's management fee range, the actual rate charged, and the total expense ratio including government levies. These are the figures that compound against you every year regardless of how the market does. Our explainer on mutual fund fees in Pakistan shows how a 3% difference in annual cost erodes a long-term holding; the table makes clear that this is exactly the gap between MIF and the two passive routes.
| Fund | Management fee (cap / actual) | Total expense ratio YTD | Of which levies | Front-end load | Other entry cost |
|---|---|---|---|---|---|
| Meezan Islamic Fund | 0% to 3% / 3.00% | 3.96% | 0.49% | 2.00% | 2% back-end on Type C units |
| KSE Meezan Index Fund | 0% to 0.75% / 0.75% | 1.27% | 0.14% | 2.00% | 0.25% transaction cost on purchases |
| Meezan Pakistan ETF | 0% to 0.75% / 0.50% | 0.96% | 0.09% | None | Brokerage and CDC charges set by your broker |
Two details from the fine print. KMIF's FMR footnote says a transaction cost of 0.25% is charged on purchases of its units, on top of the 2% front-end load, which Al Meezan may waive at its discretion for online or direct investors. The ETF's management fee is capped at 0.75% but the actual rate charged in August was 0.50%, and its expense ratio of 0.96% year to date is the lowest of the three by a clear margin. The MIF expense ratio of 3.96% means the fund must beat the KMI-30 by roughly four percentage points a year just to match an index tracker after costs.
Returns versus the KMI-30: FY26, three years and five years
The FMR reports cumulative returns to 31 August 2026 and annual returns by financial year, all on a NAV-to-NAV basis with dividends reinvested, before any sales load. For MIF and KMIF the benchmark column is the KMI-30. For the ETF the benchmark is the Meezan Pakistan Index, a narrower, liquidity-weighted basket drawn from KMI-30 constituents, so its benchmark return differs from the KMI-30 figure in the same period.
| Period to 31 Aug 2026 | MIF | KMIF | KMI-30 | MZNPETF | MZNPI (ETF benchmark) |
|---|---|---|---|---|---|
| 1 month | 1.34% | 1.70% | 1.80% | 2.15% | 2.35% |
| FYTD (from 1 July 2026) | -3.38% | -2.37% | -2.20% | -1.29% | -1.02% |
| 1 year | 13.06% | 17.46% | 18.50% | 20.44% | 22.38% |
| 3 years cumulative | 235.00% | 220.77% | 235.68% | 209.23% | 230.53% |
| 5 years cumulative | 194.74% | 198.79% | 224.13% | 165.80% | 189.62% |
| FY26 (year to June 2026) | 33.02% | 38.09% | 39.18% | 39.59% | 41.80% |
| FY25 | 59.22% | 43.52% | 46.24% | 31.76% | 33.38% |
| FY24 | 73.00% | 75.02% | 78.70% | 85.78% | 93.94% |
Read the table in two halves. In FY25, MIF's stock picking beat the KMI-30 by almost 13 percentage points, which is why its three-year cumulative return of 235.00% sits level with the index despite its fees. In FY26 and the latest twelve months it gave much of that back, lagging the index by 6.2 and 5.4 points. Our analysis of why every Islamic equity fund lagged the KMI-30 in FY26 explains the sector positioning behind that. KMIF, by contrast, never beats the index and never lags it by much. Since inception MIF has compounded at 17.40% a year against 16.47% for the KMI-30; KMIF has compounded at 15.60% against 17.81% since its 2012 launch; the ETF at 20.07% against 22.44% for its own index.
Tracking difference: how closely KMIF and the ETF follow their index
An index fund's job is to lose as little as possible to the index, and the gap is the tracking difference. KMIF's one-year return of 17.46% against 18.50% is a tracking difference of about -1.04 percentage points, which is consistent with its 1.27% expense ratio less a little dividend timing. Over FY26 the gap was -1.09 points, over FY25 -2.72 points and over FY24 -3.68 points. Over five years the cumulative gap has widened to about 25 points (198.79% against 224.13%), which is what a 1% to 2% annual drag does when compounded through a strong market.
The ETF publishes its tracking difference directly. Against the Meezan Pakistan Index it lagged by 1.94 points over one year, 2.21 points in FY26, 1.62 points in FY25 and 8.16 points in FY24, with a since-inception annualised gap of 2.37 points. That FY24 figure is large for a 0.96% expense product, and it reflects cash drag and dividend timing during a year when the index rose 93.94%. Note also that the ETF's benchmark is not the KMI-30, so comparing MZNPETF's 20.44% one-year return with KMIF's 17.46% partly measures a different basket of stocks, not just a cheaper wrapper. Our MZNPETF versus MIIETF comparison looks at how it compares with the other listed Islamic ETF.
How you buy and sell each one
MIF and KMIF are bought from Al Meezan directly, through its app and website, through Meezan Bank branches or through a distributor, at forward pricing. The FMR lists cut-off times of 9:00 AM to 3:00 PM Monday to Thursday and 4:00 PM on Friday for MIF, and 2:30 PM and 3:30 PM for KMIF. Orders received before cut-off get that day's closing NAV; redemptions are paid to your bank account within the regulatory settlement period. You can set up a monthly investment plan and you can hold units for a lifetime without touching a broker.
The ETF requires a brokerage account with a PSX member and a CDC sub-account. You buy and sell MZNP-ETF during market hours at the quoted price, which may sit slightly above or below the NAV published for that day, and the FMR describes its pricing as backward and its dealing as per market hours. You pay brokerage commission and CDC charges on each trade instead of a front-end load, which favours lump sums and penalises small monthly purchases. Our guide to buying halal stocks on the PSX covers account opening and the costs brokers quote. Mahaana also offers a route into the rival MIIETF for investors who prefer a digital wealth manager over a traditional broker.
Dividends, purification and tax
All three are growth products in the FMR's unit type column, so income is reflected in NAV rather than paid out by default, though the funds can declare distributions. Dividend purification, the removal of any non-compliant income from the underlying companies, is carried out at fund level under SECP's Shariah governance regulations and the fund's Shariah advisor signs off the annual compliance report; you do not need to purify again as a unit holder. Our explainer on dividend purification in Pakistan shows what the funds disclose and how to read the purification note in the annual report.
Tax treatment follows the mutual fund rules for the open-end funds and the listed security rules for the ETF, and it changes with each Finance Act. Capital gains on both are taxable at rates that depend on holding period and filer status, and zakat deduction at source applies to mutual fund units unless you file the exemption declaration. Treat tax as a question for the latest rate card rather than a reason to pick one wrapper over another; the fee gap is larger and more certain than any tax difference.
Who should choose what
Choose KSE Meezan Index Fund if you want KMI-30 exposure, want to invest monthly without a broker, and accept a 1% to 2% annual drag as the price of simplicity. It is the default for a salaried saver building a position over years. Choose the Meezan Pakistan ETF if you already have a PSX account, invest in lump sums, want the lowest ongoing cost at 0.96%, and are comfortable that you are tracking a narrower index than the KMI-30 with a visible tracking gap. Choose Meezan Islamic Fund only if you believe Al Meezan's stock pickers will repeat FY25 more often than FY26; its 17.40% since-inception compound return against 16.47% for the index says they have, over 23 years, but the 3.96% expense ratio means every year of underperformance costs you more than it would in the passive options. For a first-time investor the ordering is KMIF, then the ETF once you have a broker, then MIF as a satellite rather than a core. Start with the investing hub, check the halal stocks guide for how the KMI-30 is screened, and read how to invest halal before you commit. Facts checked against almeezangroup.com, psx.com.pk on 11 September 2026.
Frequently asked questions
Is KSE Meezan Index Fund better than Meezan Islamic Fund?
On cost, yes: KMIF charges 0.75% and runs a 1.27% expense ratio against MIF's 3.00% fee and 3.96% ratio. On returns it depends on the period. Over the year to August 2026 KMIF returned 17.46% against MIF's 13.06%, but in FY25 MIF beat the index by almost 13 points. Over three years they are close; over five years KMIF is slightly ahead. For most savers the lower, predictable cost of the index fund wins.
Does the Meezan Pakistan ETF track the KMI-30?
No. Its benchmark is the Meezan Pakistan Index (MZNPI), an index constituted and maintained by Al Meezan from KMI-30 stocks selected for market capitalisation and traded value. It is narrower than the KMI-30 and its returns differ: 22.38% over the year to August 2026 against 18.50% for the KMI-30. The ETF returned 20.44%, a tracking difference of about -1.94 points against its own index.
What is the minimum investment in Al Meezan funds?
The August 2026 FMR does not state minimums, so check Al Meezan's offering documents and app for current thresholds; they have historically been low enough for monthly plans in the low thousands of rupees. For the ETF there is no fund minimum at all: you buy as few units as you like on the PSX at roughly Rs 17.90 each at the end of August 2026, subject to your broker's minimum commission, which makes very small trades expensive.
Do I pay a front-end load on KMIF?
The FMR lists a 2.00% front-end load for KMIF plus a 0.25% transaction cost on purchases, with back-end load nil. Loads are charged at Al Meezan's discretion and are often waived or reduced for direct online investment, so confirm the applicable load before you pay. The ETF has no load; you pay brokerage and CDC charges instead. MIF also lists a 2.00% front-end load and a possible 2% back-end load on Type C units.
Which Al Meezan equity fund has the best long-term record?
Measured since inception, Meezan Islamic Fund has compounded at 17.40% a year since August 2003 against 16.47% for the KMI-30, turning Rs 100 into roughly Rs 4,057. KMIF has compounded at 15.60% since May 2012 against 17.81% for the index, and the ETF at 20.07% since October 2020 against 22.44% for its benchmark. Different start dates make direct comparison unfair; the five-year figures in the table are the fairer test.
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Are these funds Shariah compliant and who certifies them?
Yes. Each FMR page states that the product has been approved by Al Meezan's Shariah advisor, Dr Muhammad Imran Ashraf Usmani, SECP registration SECP/IFD/SA/005. MIF and KMIF hold KMI-30 constituents, which pass the PSX and Meezan Bank screening for business activity, debt, non-compliant income and liquidity. The ETF holds a liquidity-weighted selection of the same screened universe. Purification of any impermissible income happens at fund level.
