🕌 Quick answer: MIIETF (Mahaana Islamic Index ETF) tracks a broader 30-stock index (MII30) and carries a lower total expense ratio (~1.15% p.a.). MZNPETF (Meezan Pakistan ETF) tracks a smaller, more concentrated index (MZNPI) of Pakistan's most liquid Islamic large-caps, has a five-year-plus track record since October 2020, and currently pays a much higher trailing dividend yield. Neither is "better" outright — MIIETF suits investors who want broader diversification, MZNPETF suits those comfortable with concentration in exchange for a longer performance history.
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What Is MIIETF?
MIIETF (Mahaana Islamic Index Exchange Traded Fund) is an open-end, passively managed ETF listed on the PSX on 11 March 2024. It's managed by Mahaana Wealth Limited, a specialised Islamic asset manager, with Central Depository Company of Pakistan (CDC) acting as trustee.
MIIETF tracks the Mahaana Islamic Index (MII30) — a benchmark built by selecting the top 30 Shariah-compliant companies from the broader KMI All Share universe, ranked by free-float market capitalization and traded value. Because it draws from 30 constituents rather than a handful of the very largest names, MIIETF's sector exposure is comparatively spread out: Fertilizer (~19%), Oil & Gas Exploration (~18%), Cement (~14%), Power Generation & Distribution (~12%), and Commercial Banks (~10%) are its largest sectors, with the rest spread across smaller weights.
What Is MZNPETF?
MZNPETF (Meezan Pakistan Exchange Traded Fund) is the older of the two, listed on the PSX on 6 October 2020. It's managed by Al Meezan Investment Management Limited — Pakistan's largest Shariah-compliant asset manager — with CDC again acting as trustee.
MZNPETF tracks the Meezan Pakistan Index (MZNPI), which draws only from Shariah-compliant KMI-30 constituents but weights them more heavily toward liquidity — companies must trade on at least 98% of sessions in the preceding six months to qualify. The practical effect is a much smaller, top-heavy basket: as of the index's most recent recomposition, Fauji Fertilizer Company (~15%), Engro Holdings (~13%), Meezan Bank (~11%), Hub Power Company (~11%), OGDC (~10%), and Lucky Cement (~10%) alone made up roughly 70% of the index.
💡 Both funds ultimately draw their universe from KMI-screened (Shariah-compliant) stocks. The real difference is breadth — MIIETF spreads across 30 names, MZNPETF concentrates in a much smaller, more liquid subset.
Head-to-Head Comparison
| Feature | MIIETF | MZNPETF |
|---|---|---|
| Full name | Mahaana Islamic Index ETF | Meezan Pakistan ETF |
| Manager | Mahaana Wealth Limited | Al Meezan Investment Management |
| Benchmark index | Mahaana Islamic Index (MII30) | Meezan Pakistan Index (MZNPI) |
| Listed on PSX since | 11 March 2024 | 6 October 2020 |
| Number of holdings | ~30 (broader) | Small, concentrated basket |
| Management fee | Up to 0.70% p.a. | Up to 0.50% p.a. |
| Total expense ratio (TER) | ~1.15–1.16% p.a. | ~1.41% p.a. |
| Fund size (AUM, mid-2026) | ~Rs 1.9 billion | ~Rs 2.3 billion |
| Trustee | CDC Pakistan | CDC Pakistan |
AUM, price, and yield figures move daily — treat the table above as directional, and check PSX's live MIIETF page or MZNPETF page for current numbers before trading.
Portfolio Concentration Compared
This is the single biggest structural difference between the two funds. MII30 is designed as a broad Islamic index — its largest single sector (Fertilizer) makes up under a fifth of the fund, and the top 5 holdings (K-Electric, Hub Power, Engro Holdings, Fauji Cement, Systems Limited) are a comparatively modest share of the total.
MZNPI, by contrast, is explicitly liquidity-weighted, and the effect shows up directly in the numbers: its top 6 holdings alone make up roughly 70% of the index. That means MZNPETF's performance is much more tightly tied to how a handful of large, liquid names — fertilizer, E&P, banking, power, and cement bellwethers — perform in a given year, for better or worse.
| Concentration | MIIETF (MII30) | MZNPETF (MZNPI) |
|---|---|---|
| Design intent | Breadth across 30 Shariah names | Liquidity-weighted, fewer names |
| Top sector weight | ~19% (Fertilizer) | Higher — top single stock alone ~15% |
| Concentration risk | Lower — more spread out | Higher — top 6 names ≈ 70% of fund |
Fees: Headline Rate vs True Expense Ratio
It's tempting to compare ETFs purely on their advertised management fee — but that's only one line item. The Total Expense Ratio (TER), which folds in trustee fees, custodian charges, audit costs, and SECP regulatory levies, is what actually eats into your return every year.
Here the two funds invert: MZNPETF advertises a lower management fee (0.50% vs MIIETF's 0.70%), but once all the add-on costs are included, MIIETF's TER (~1.15–1.16%) ends up cheaper than MZNPETF's (~1.41%). The lesson: always ask for the TER from the Fund Manager Report, not just the headline management fee quoted in marketing material.
⚠️ Both TERs (1.1–1.4% p.a.) are still far above what developed-market index ETFs charge (often under 0.10% p.a.). That's the cost of a small, young market with fewer economies of scale — factor it into your long-term return expectations.
Returns & Dividend Yield
MZNPETF has the longer runway to judge — it has traded through five-plus fiscal years, including 2022's downturn and the FY24–FY26 rally, averaging roughly 19% per year since its October 2020 listing. MIIETF's track record only starts in March 2024, but it happened to launch right before the KSE-100's record two-year run, and has averaged a much higher annualised return since inception — a reflection of that unusually strong window rather than a stable baseline to expect going forward.
Dividend policy differs sharply too. Both funds distribute at least 90% of accounting income as bonus or cash dividends per their offering documents, but MZNPETF's trailing yield has recently run near 20%, while MIIETF's has been closer to 4–5% — largely because MZNPETF, being older and having accumulated more realised gains in its liquidity-weighted large-caps, has more to distribute in a given payout cycle. Treat both yield figures as a snapshot of recent distributions, not a guaranteed forward rate.
How to Buy Either One
Both trade exactly like ordinary PSX shares — there's no separate process for ETFs versus stocks:
- Open a brokerage account with a PSX TREC-holder (Arif Habib, AKD Securities, Alfalah Securities, JS Global, Topline, and others all support ETF orders).
- Complete CNIC-based KYC and link a CDC sub-account — most brokers do this digitally within 1–3 business days.
- Fund your trading account via bank transfer or Raast.
- Search the ticker — MIIETF or MZNPETF — on your broker's terminal or app and place a limit or market order for one lot.
- Units settle into your CDC account on a T+2 basis, same as any other PSX security.
Overseas Pakistanis can do all of this remotely through a Roshan Digital Account without needing to be physically present.
Tax & Zakat Treatment
Both ETFs follow the same tax rules under Pakistan's Income Tax Ordinance, since both are PSX-listed securities. Capital gains tax depends on your holding period and filer status — use the Capital Gains Tax Calculator to estimate what you'd owe on a specific sale. Dividend distributions from either fund are subject to withholding tax at source, at the standard rate for filers versus non-filers.
Units of either ETF held as investments are generally zakatable at market value once your total zakat-eligible wealth crosses nisab — both being Shariah-compliant doesn't exempt the holding itself from zakat. The Zakat Calculator includes stocks and fund units alongside gold, silver, and cash in its nisab check.
Which One Should You Choose?
MIIETF may suit you if:
- You want broader diversification across 30 Shariah-compliant names rather than concentrated exposure to a handful of large-caps.
- You're cost-sensitive on an ongoing basis — its lower TER compounds in your favour over a long holding period.
- You're comfortable with a shorter live track record (since March 2024) in exchange for that broader spread.
MZNPETF may suit you if:
- You want a longer performance history to evaluate — over five years of live trading through both up and down markets.
- You're comfortable with concentrated exposure to Pakistan's largest, most liquid Shariah-compliant sectors (fertilizer, E&P, banking, power, cement).
- Higher recent dividend income matters to you more than index breadth — though remember this yield isn't fixed and can vary sharply year to year.
🧮 Nothing stops you from holding both. Since each draws from the same KMI-screened universe with different weighting logic, splitting an allocation between MIIETF and MZNPETF blends broader diversification with concentrated large-cap exposure, without introducing a fundamentally different risk profile.
Risks to Keep in Mind
- Market risk: both are pure equity ETFs with no capital protection — a KSE-100/KMI-30 downturn drags both down, MZNPETF potentially more sharply given its concentration.
- Liquidity risk: Pakistani ETFs, including both of these, trade thinner volumes than large individual stocks — check the daily volume before placing a large order.
- Concentration risk (MZNPETF specific): with ~70% of the fund in six names, a shock to any one of those sectors has an outsized effect versus MIIETF's broader spread.
- Short track record (MIIETF specific): its since-inception return reflects one unusually strong two-year window for Pakistani equities and hasn't yet been tested through a full down cycle as a live fund.
- Tracking error: fees, cash drag, and rebalancing lags mean neither ETF will perfectly mirror its benchmark index.
Frequently Asked Questions
Sources
Fund figures are compiled from PSX's official ETF data pages and each fund manager's public disclosures. Prices, AUM, and yields change daily — always verify against the live source before trading.
- PSX — MIIETF fund page
- PSX — MZNPETF fund page
- Mahaana Wealth — MIIETF fund details
- Al Meezan — MZNPETF Key Fact Statement