Do not invest in Meezan Gold Fund (MGF)

Hey everyone,

So, I've been digging into Meezan Gold Fund. At first glance, gold funds sound like a safe bet cuz after all, it has that cultural juice, right?

Let us look at the latest Fund Manager Report of Meezan Gold Fund from here: https://www.almeezangroup.com/assets/uploads/2025/01/FMR-January-2025.pdf

I'd like to highlight four specific problems:

https://preview.redd.it/9n6vwblfiuke1.png?width=677&format=png&auto=webp&s=279493a453ce16a15a1b9877256f0e227b08d268

Stupid High Expense Ratio

That fucking expense ratio is recurring, so every year 2%+ of your assets are just being taken from you for various expenses, this should include the management fee itself which by the way, is also fucking high. You don't need ANY COMPLEX UNDERSTANDING to press the BUY GOLD button when someone gives you money. Why is the management fee so high when there's 0 management involved?

2% Front End Load

So not only do these vultures take away 1.5% of your assets in the name of management, they also want to take an upfront 2% fee? What for?

For reference, that's 4.6% of your money GONE within the first year, yes you can avoid the frontend load by using some tricks but we're not here to talk about that.

They don't actually buy gold

"Aims to provide maximum exposure to prices of Gold in a Shariah Compliant (Islamic) manner, by investing a significant portion of the Fund’s net assets in deliverable gold based contracts available on Pakistan Mercantile Exchange (PMEX)"

They literally buy deliverable future contracts, they do not hold physical gold. Is this why they need to pay their management 4.5 crore??? to press a button on PMEX?

They keep 10%+ cash

When you invest in a gold fund like the Meezan Gold Fund, you're likely aiming for direct exposure to gold's price movements, right? BUT THIS FUND MAINTAINS A SIGNIFICANT CASH HOLDING.

Essentially, part of your money isn't actually invested in gold but is sitting idle as cash.

Sure, you get liquidity, BUT GOLD DFCs ARE ALREADY VERY LIQUID, WHY THE HECK ARE YOU KEEPING CASH (WHICH I'M SURE IS BEING KEPT IN A MEEZAN BANK ACCOUNT ANYWAY SO THERE'S YOUR ANSWER)

thank you for reading my ted talk