April 20, 2025 (MLN): With growing investor confidence and an increasing shift toward Shariah-compliant financial solutions, the Islamic mutual fund industry in Pakistan is thriving. Most recently, Lucky Investments made headlines by successfully raised Rs50 billion during the Initial Public Offering (IPO) of its debut fund, the Lucky Islamic Money Market Fund.
This was undoubtedly a historic feat in the country’s asset management space, particularly within the Shariah-compliant landscape. The overwhelming investor response clearly signaled that the market is ready and eager for such offerings.
We sat down with Mr. Mohammad Shoaib, CFA, the CEO of Lucky Investments Limited and the visionary behind this achievement to discuss what fueled this overwhelming investor response, the future of Islamic investing, and his journey of building not one, but two iconic Islamic asset management firms in Pakistan.
- What inspired the YB Group to venture into Islamic asset management at this point in time? Was there a particular gap or opportunity that stood out?
MS: The YB Group has always been a dynamic and forward-looking conglomerate. Starting from its roots in textiles, it has successfully diversified into several key industries — cement, chemicals, pharmaceuticals, automobiles, and even mobile phones. The group has consistently ventured into sectors where it saw untapped potential and a need for value creation.
Interestingly, financial services had remained an unexplored area for the group — until now. With the growing emphasis on Islamic finance and the anticipated shift toward complete Shariah compliance in the financial sector over the next three years, the timing felt right. The group recognized this as a strategic opportunity to enter and contribute meaningfully to the Islamic financial landscape.
If we look at mutual funds in Pakistan, the penetration is still quite low — only about one million investors are currently engaged, which is a fraction of what we see in comparable markets. For instance, India has over 148 million mutual fund investors, roughly 10% of its population. By that ratio, Pakistan should have at least 24 million mutual fund investors. This massive gap signals immense growth potential.
Lucky Group identified this white space and decided to establish its presence in the mutual fund industry. Lucky Investments is just the beginning — the group envisions expanding into other financial verticals like REITs, private equity, Sukuk, and voluntary pension schemes in the future, as the company scales and matures.
- How do you envision Lucky Investments reshaping the Islamic asset management landscape in Pakistan over the next five years?
MS: Our strategy is built around the demographic reality that nearly 50% of Pakistan’s population is 30 years old or younger. This presents a unique opportunity to engage a tech-savvy and financially aware generation that is open to new ideas — especially in ethical and Shariah-compliant investing.
Traditionally, asset management companies have followed a brick-and-mortar approach — opening physical branches to expand their presence. While that remains important, Lucky Investments plans to complement it with a strong digital-first strategy.
With over 220 million mobile phones in use across the country and widespread access to the internet, digital connectivity is no longer a hurdle. Social media platforms are extensively used — people engage with these platforms multiple times a day. This digital infrastructure gives us the ability to reach out to the masses efficiently and at scale.
Our vision is to build a highly accessible, user-friendly, and transparent platform that simplifies Islamic investing for everyone — from a college student to a first-time investor.
- The Rs50 billion IPO was a historic achievement. What do you think contributed most to this overwhelming investor response?
MS: First and foremost, I am deeply grateful to the Almighty for this remarkable milestone. This was our very first step as Lucky Investments, and the response has been overwhelming. I am also incredibly thankful to our investors, whose trust and confidence made this possible.
Having launched Al Meezan back in 2003, I can speak from experience — it took us nearly a decade to cross the Rs50 billion mark at that time. In contrast, with Lucky Investments, we achieved this milestone in just three days. That, in itself, speaks volumes about the market’s readiness and the deep trust investors have in both the Lucky Group and the broader YBG ecosystem.
I believe the most critical factor behind this success has been the strength of investor confidence — not just in the idea of Islamic asset management, but in our team, our vision, and most importantly, in the credibility of our sponsoring group. When people are entrusting you with their money, trust becomes everything. And the Lucky Group’s strong reputation gave investors the assurance they needed.
We also didn’t leave things to chance — for the last two months, we were actively engaging with investors, explaining our approach, our strategy, and how we intend to manage their money. That transparency and proactive communication went a long way in building confidence.
This IPO has proven that the market is eager for credible, Shariah-compliant investment avenues — and we’re just getting started.
- What types of Shariah-compliant mutual funds can we expect next from Lucky Investments? Any focus on equity, sukuk, or hybrid products?
MS: One of the key strengths of the mutual fund industry in Pakistan is the diversity of available products. Whether an investor is looking for growth through equities, stability through fixed income, or long-term retirement planning, there are options to suit almost every financial goal — all within the mutual fund ecosystem.
At Lucky Investments, our guiding principle is to understand and respond to the evolving needs of our customers. Based on this philosophy, we have already submitted applications for four new funds to the SECP. These include a Stock Fund, an Income Fund, a Voluntary Pension Scheme (VPS), and a Fixed Return Fund. In shaa Allah, by June, we expect to bring four to five new Shariah-compliant funds to the market.
- How involved is the Shariah board in product structuring, and what does the approval process typically look like at Lucky investment?
MS: Innovation is the heartbeat of the mutual fund industry — but when it comes to Islamic finance, innovation must go hand in hand with Shariah compliance. That’s where the role of our Shariah Board becomes absolutely essential.
At Lucky Investments, we are fortunate to have Mufti Ahsan Kaleem as our Shariah Advisor. His involvement goes far beyond formal approvals. He works closely with the management team — providing ideas, feedback, and guidance from the earliest stages of product development. With his global experience and deep understanding of both finance and Shariah, he brings a unique perspective to our product structuring.
The process itself is rigorous, not cumbersome — and that’s a distinction I want to emphasize. Our Shariah Advisor ensures that every product we offer fully aligns with Islamic principles. This deep involvement not only ensures compliance but also adds innovation and credibility to what we bring to the market.
Ultimately, this is our “secret sauce”: Investors need to feel confident that any product we introduce is not just innovative, but also 100% Shariah-compliant. That trust is fundamental to our mission.
- How do you ensure the fine balance between competitive returns and strict Shariah compliance?
MS: My perspective on this is slightly different — I believe there is no real trade-off between delivering strong returns and maintaining Shariah compliance. Investors are looking for three things: Halal returns, competitive performance, and excellent customer service. And it is very much possible to deliver all three together.
It’s a misconception that in order to offer better returns, one has to compromise on Shariah principles — or that focusing on compliance reduces service quality. That’s not how we operate. At Lucky Investments, we ensure these priorities are managed in parallel, not in conflict.
Our team brings deep industry experience, and over time, we’ve mastered the art of designing products in a way that generates competitive returns while remaining fully Shariah-compliant. At the same time, we place a strong emphasis on service quality — because we understand that retaining customers depends as much on the experience as it does on the performance.
- What steps is Lucky Investments taking to educate retail investors about Islamic financial products?
MS: Creating awareness is a core part of our mission, and we’re taking a multi-pronged approach to educate retail investors about Islamic financial products. For starters, platforms like yours are already helping us spread the message — that our offerings are 100% Shariah-compliant and built with integrity.
We plan to utilize podcasts, educational content, and social media campaigns to make Islamic finance more accessible and understandable. Additionally, we’ll be organizing awareness drives, visiting schools, colleges, and universities to engage young minds and introduce them to the concept of Halal investing.
The trust in Islamic mutual funds is steadily growing. When we launched Al Meezan over two decades ago, Islamic funds had a zero percent market share. Today, they represent nearly 45% of the mutual fund industry’s total assets under management. This shift reflects the growing confidence among investors — but there’s still a long way to go.
We believe media can play a pivotal role in amplifying awareness. With the right partnerships and consistent engagement, we aim to bridge the knowledge gap and empower people to make informed, Shariah-compliant investment decisions.
- Is there a plan to expand digital accessibility — such as mobile apps, robo-advisory tools, or investment platforms — to tap into younger, tech-savvy investors?
MS: Absolutely. We are actively working on launching mobile apps and electronic investment platforms to enhance accessibility and tap into Pakistan’s younger, tech-savvy demographic.
But we’re going beyond just launching an app — we’re introducing a completely new concept in the market: a 360-degree investment supermarket. The idea is to offer not just our own mutual funds, but a comprehensive, need-based advisory solution for every investor.
Typically, asset management companies focus solely on promoting their own products. But we believe in putting the customer first. If our product suits you, we’ll recommend it — but if another AMC’s product better aligns with your financial goals, we’ll guide you there instead. That’s how deeply we value transparency and trust.
In addition to offering our own range of Shariah-compliant funds, we also plan to distribute products from other AMCs and create a unified wealth management experience.
We are also integrating with multiple banks so that our products will soon be accessible via their digital platforms.
- What were the biggest challenges you faced in scaling Shariah-compliant investing over last 20 years— and how did you overcome them?
MS: Over the last two decades, we faced three major challenges in establishing and scaling Shariah-compliant investing in Pakistan.
The first and foremost challenge was awareness and trust. When we launched our first Islamic mutual fund, many people were skeptical. The most common belief was, “This fund won’t survive.” We had to work hard to build credibility — to prove not just that the product was genuinely Shariah-compliant, but that it could also deliver competitive returns.
Establishing that trust took time, education, and consistent performance.
The second major hurdle was the limited availability of Shariah-compliant instruments — especially in the money market and fixed income space.
At the time, Sukuks were few and far between, which made portfolio construction very difficult. To address this, we engaged closely with the State Bank of Pakistan and SECP. Through years of effort and advocacy, we helped facilitate the development of Islamic capital market instruments.
Today, we have various Sukuks listed on the Pakistan Stock Exchange, and the private sector is also becoming more active in issuing them.
Still, I must say — product availability remains a challenge we continue to work on.
Thirdly, regulatory understanding and support for Islamic finance needed to evolve. In the early years, explaining the nuances of Shariah-compliant finance to regulators was a challenge.
But now, SECP has developed its own Shariah Advisory Board and is far more equipped to evaluate and promote Islamic financial products.
We have worked closely with them over the years, and it’s encouraging to see their proactive role in this space today.
- Do you think the Islamic fund industry will now become more competitive with Lucky investment entering the arena?
MS: I don’t think Lucky Investments is here to compete in the conventional sense. In fact, I believe there’s enough room for everyone — the goal should be to collectively grow the size of the Islamic investment pie. If the overall pie becomes bigger, then every player will get a larger share. The real opportunity lies in expanding the market, not fighting over the existing share.
Traditionally, mutual fund players have focused on drawing funds from those already within the financial ecosystem. But with the backing of the Lucky Group, we have a unique advantage — we’re tapping into sectors and segments where awareness about Islamic investments is still very limited.
The Lucky Group operates across various industries — cement, chemicals, pharmaceuticals, and more. Through this group synergy, we are reaching out to a completely new pool of potential investors: vendors, distributors, and suppliers who may not have previously considered mutual funds as an investment avenue.
These untapped communities are now showing interest and participating — which shows how massive the potential really is.
So rather than creating competition, we are working to bring new investors into the industry and create greater awareness.
- What policy reforms or regulatory support do you believe could further catalyze growth in Pakistan’s Islamic mutual funds?
MS: The SECP is our regulator, and we have always received strong support from them. In my experience — both in Pakistan and globally — regulators play two key roles: one is to regulate the industry, and the other is to drive market development.
Traditionally, our regulators have emphasized the regulatory side — which is essential, especially when an industry is in its nascent stage.
In the early days of Pakistan’s mutual fund industry, this approach made sense to ensure transparency, governance, and investor protection.
However, once an industry matures and reaches a certain scale, the role of the regulator must evolve. At that point, market development becomes equally — if not more — important.
Now that the Islamic mutual fund segment has achieved significant growth, I believe the SECP should shift more of its focus toward fostering innovation, encouraging new product development, and expanding investor outreach.
Policy reforms that support Shariah-compliant instruments, enable digital access, and encourage broader awareness will be key.
With a balanced approach that maintains regulatory oversight while actively facilitating growth, the Islamic mutual fund industry in Pakistan can truly thrive.
- What will be your message to the investors in terms of savings and investments?
MS: My message to both young and older investors is simple: Focus on saving. It’s essential for securing your long-term financial goals and ensuring a comfortable retirement.
Unfortunately, in Pakistan, the savings and investment rates are quite low. If we look back 20 years ago, Pakistan’s savings and investment rates were on par with India, but today we have significantly fallen behind.
Young people, in particular, need to start saving and investing as early as possible. The key reason for this is inflation — savings alone will lose their value over time.
Investments, on the other hand, offer the potential to grow and protect wealth.
The earlier you start, the greater the potential for returns. Delaying your investments means less time for your money to grow and, consequently, lower returns. Starting early is the best way to secure a financially stable future.
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