After a year of surging gold prices and near-record returns in the Pakistan Stock Exchange, investors are now starting 2026 with increased uncertainty. With expectations of lower interest rates, higher taxes on savings, slowing property markets, and more expensive equities, the easy gains of the past few years seem to be over.
Many Pakistanis are now focused on safeguarding their wealth in a challenging investment landscape rather than seeking quick profits. Attention is shifting towards identifying which asset classes remain viable in the evolving economic scenario.
While some individuals still prefer keeping their money in current accounts out of habit or religious reasons, these accounts offer no returns. On the other hand, banks earn significant returns by investing these funds in government securities.
Savings accounts offer slightly better returns but are still modest, typically below the State Bank of Pakistan’s policy rate. Recent tax changes have further reduced post-tax returns, particularly for those with larger savings balances.
Investors who prioritize low-risk options often turn to fixed-income mutual funds, which invest in government securities and bank deposits. These funds provide daily liquidity and professional management, offering slightly higher returns than savings accounts after adjusting for management fees.
For those seeking higher growth, balanced mutual funds present a middle ground by investing in both equities and fixed-income instruments. These funds are suitable for individuals willing to tolerate some short-term volatility for better long-term returns, especially in declining interest rate environments.
Pension funds are often overlooked but can be valuable investment tools, especially for salaried individuals. Contributions not only aid in building long-term retirement savings but also offer significant tax benefits, making a noticeable impact on annual finances.
While precious metals like gold and silver continue to attract interest, experts caution against expecting endless price increases. The discussion around crypto assets has also resurfaced, with hopes for a formal regulatory framework in Pakistan due to improved global engagement and policy signals.
