PSX Stocks vs. Mutual Funds: Which Is Better?
Many new investors wonder: “Should I pick my own stocks or let a fund manager do it?” Here’s the data.
Direct Stock Investing
Pros: Full control, lower costs (no management fee), potential for higher returns. Cons: Requires research, time, and emotional control.
Equity Mutual Funds (e.g., Meezan Islamic Fund)
Pros: Diversified, professional management, low minimum (Rs. 5,000). Cons: Fees (1–2% annually), returns capped by fund’s performance.
5‑Year Performance Comparison
- KSE-100 (direct stocks): ~15% annualized (higher volatility).
- Top equity mutual funds: ~12–13% annualized (smoother ride).
Our advice: Start with virtual stock picking to learn. Then, invest in a diversified fund while you pick individual stocks for fun.