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.

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