Pakistan currently has one fixed-income ETF listed on the PSX: HBLTETF, managed by HBL Asset Management Limited. It is also the highest-NAV ETF on the exchange (PKR 113.19 as of June 2026) - a reflection of five years of consistent compounding from government securities.
This page explains what fixed-income ETFs are, what HBLTETF specifically holds, when it makes sense for Pakistani investors, and where its limitations matter.
What Is a Fixed Income ETF?
A fixed-income ETF holds debt instruments instead of equities. Rather than owning shares in companies, you own a portfolio of bonds or government securities that pay regular interest. In Pakistan, the available instruments are:
- Pakistan Investment Bonds (PIBs) - Medium to long-term government debt (3, 5, 10-year tenors)
- Market Treasury Bills (T-Bills) - Short-term government debt (3, 6, 12-month tenors)
Fixed-income ETFs trade on the PSX like equity ETFs - you buy and sell intraday through your broker - but the underlying portfolio behaves very differently. When equity markets fall, government securities often hold or appreciate. That counter-cyclical behaviour is the core reason to hold fixed income.
HBLTETF - Pakistan's Only Fixed Income ETF
HBL Total Treasury ETF (HBLTETF) tracks the HBL Total Treasury Index, a blend of short and medium-term Pakistan Government Securities (G-Secs). Key facts as of June 2026:
| Metric | Value |
|---|---|
| Manager | HBL Asset Management Limited |
| Index | HBL Total Treasury Index |
| Holdings | Pakistan T-Bills & PIBs |
| NAV | PKR 113.19 |
| Management Fee | 0.50% |
| Est. TER | ~0.70–0.85% |
| AUM | PKR 559 million |
| Shariah Compliant | No |
| SECP Risk Rating | Low–Moderate |
The rate-cycle context matters: When the SBP policy rate peaked at 22% in 2023–2024, HBLTETF was delivering government-bond equivalent yields with near-zero equity risk. As rates normalise toward 12–13% in 2026, forward returns will moderate - but the capital-preservation characteristic remains.
When HBLTETF Makes Sense
For conservative Pakistani investors: If your primary objective is capital preservation - protecting rupee value while earning a real return above inflation - HBLTETF is the only exchange-traded product for that mandate on the PSX.
For portfolio balance: A long-term equity portfolio (MIIETF, UBLPETF) that adds a 30–40% HBLTETF allocation reduces overall volatility significantly. When equity markets correct sharply, the fixed-income allocation cushions the drawdown.
For intraday liquidity: Unlike a money market mutual fund that prices once per day, HBLTETF trades live on the PSX. If you need to exit a capital-preservation position during market hours, HBLTETF gives you that flexibility.
Where HBLTETF Falls Short
Not Shariah-compliant. HBLTETF holds conventional government debt. For a Shariah-conscious Pakistani investor needing a safe-haven allocation, there is no equivalent Shariah product currently listed as an ETF. This is a genuine gap in Pakistan's ETF market - a Sukuk ETF would fill it immediately.
Returns are rate-sensitive. As the SBP policy rate falls, HBLTETF's yield will fall with it. At 10% policy rate, money market mutual funds offering daily liquidity at similar or better rates become a more competitive alternative.
Not a money market substitute. If you need emergency funds accessible same-day, HBLTETF's T+1 settlement means you are one business day from cash. A bank account or money market mutual fund is the correct vehicle for true emergency liquidity.
Fixed Income ETF vs Money Market Mutual Fund
| HBLTETF | Money Market Mutual Fund | |
|---|---|---|
| Shariah option | No | Yes (Meezan Cash Fund, Al-Meezan Income) |
| Settlement | T+1 | T+0 or T+1 |
| Intraday trading | Yes | No |
| Auto-SIP available | No* | Yes |
| Returns | Linked to G-Sec rates | Linked to overnight repo / KIBOR |
| TER | ~0.70–0.85% | 0.50–1.00% |
* While ETFs do not natively support direct-debit SIPs via the AMC, some advanced brokers may offer "scheduled buying" on their platforms. This is a broker-specific feature, not an instrument-level feature.
The right choice depends on your need: intraday tradeable fixed income → HBLTETF; Shariah-compliant capital preservation or emergency fund → money market mutual fund.
Learn More
- HBLTETF Full Review - Complete analysis including performance history, tracking quality, and how it has behaved through Pakistan's rate cycle.
This article is for educational and informational purposes only. It does not constitute investment advice. Always conduct your own due diligence and consult a qualified financial advisor before making any investment decisions. All data sourced from PSX, MUFAP, and fund factsheets. Past performance is not indicative of future results.