New sector ETF launched this week with a genuinely different…
New sector ETF launched this week with a genuinely different weighting methodology — actually worth a look for once.
Pakistan Stock Exchange
What are ETFs and which ones trade on PSX?
Last reviewed:
Short answer
An exchange-traded fund (ETF) is a fund that holds a basket of shares tracking an index and trades on the exchange like a single share. PSX's first ETFs launched in 2020 — the UBL Pakistan Enterprise ETF and NIT Pakistan Gateway ETF — followed by the Shariah-compliant Meezan Pakistan ETF and NBP Pakistan Growth ETF. You buy them through any PSX broker, getting instant diversification at low cost, though trading volumes are small.
PSX ETFs at a glance
Check PSX's current listings for any new or delisted ETFs before investing.
| ETF | What it tracks | Note |
|---|---|---|
| UBL Pakistan Enterprise ETF | Nine large companies from the KSE-100's top 25, excluding oil and gas | Among the first PSX ETFs (2020) |
| NIT Pakistan Gateway ETF | Stocks making up the top 50% of KSE-100 free-float market cap | Among the first PSX ETFs (2020) |
| Meezan Pakistan ETF | Meezan Pakistan Index of Shariah-compliant shares | Shariah-compliant; about Rs 1.44 billion in net assets in June 2026 |
| NBP Pakistan Growth ETF | A growth-oriented index of PSX shares | Launched in the same early wave |
ETF vs mutual fund
| ETF | Open-end mutual fund | |
|---|---|---|
| How you buy | On PSX through a broker, at market price | From the asset manager at end-of-day NAV |
| Pricing | Changes through the day | Once a day |
| Management | Passive, follows an index | Often actively managed |
| Costs | Low expense ratio plus brokerage | Management fee, sometimes a front-end load |
| Liquidity in Pakistan | Depends on PSX trading volume | Redeem with the fund |
How to buy an ETF
- Use your PSX brokerage and CDC account — no separate fund account is needed.
- Search the ETF's ticker and check its price against the published indicative NAV.
- Use limit orders: thin volumes can create wide gaps between bid and ask.
- Hold for the long term; dividends are distributed by the fund.
Pros and cons
- Pro: one purchase gives exposure to a basket of leading companies.
- Pro: transparent holdings and low running costs.
- Pro: a Shariah-compliant option exists for Islamic investors.
- Con: low trading volumes can make prices deviate from NAV.
- Con: concentrated indices — some hold only around ten stocks.
- Con: like any equity investment, values fall in market downturns.
Indicative NAV and premiums
Each ETF publishes an indicative net asset value (iNAV) based on the prices of the shares it holds. In a liquid market the ETF's own price stays close to it, because authorised participants can create or redeem units. On PSX, where ETF volumes are small, the market price can drift above (a premium) or below (a discount) the iNAV for a while. Compare the two before placing an order and avoid market orders at the open or close.
Roman Urdu mein jawab
ETF kya hai aur PSX par kaun se ETF hain?
ETF ek fund hai jo kisi index ke shares ki tokri rakhta hai aur exchange par ek share ki tarah bikta hai. PSX ke pehle ETF 2020 mein aaye — UBL Pakistan Enterprise ETF aur NIT Pakistan Gateway ETF — phir Shariah-compliant Meezan Pakistan ETF aur NBP Pakistan Growth ETF. Kisi bhi PSX broker se khareed sakte hain; trading volume kam hai.
Frequently asked questions
Is there an ETF that tracks the KSE-100?
PSX ETFs track indices built from KSE-100 constituents, such as the NIT Pakistan Gateway ETF's top-50% free-float index, rather than the full 100-share index.
Is the Meezan Pakistan ETF halal?
It tracks an index of Shariah-compliant shares under a Shariah adviser, which most scholars accept, with purification handled by the fund.
Can overseas Pakistanis buy PSX ETFs?
Yes, through Roshan Equity Investment via a Roshan Digital Account, like any other listed security.
Are ETF dividends taxed?
Fund distributions are taxed under the mutual fund dividend rules; check the current rates and your filer status.