Pakistan Journal of Social Sciences (PJSS) Vol. 35, No. 2 (2015), pp. 681-689 Conditional Performance Evaluation of Equity Mutual Funds of Pakistan Ghulam Ali Bhatti, PhD Assistant Professor, Department of Business Administration University of Sargodha, Sargodha, Pakistan. ghulamali_bhatti@yahoo.com MubasharTanveer Lecturer, Department of Commerce University of Sargodha, Sargodha, Pakistan. mubashartanveer@yahoo.com Maqbool Hussain Sial, PhD Dean, Faculty of Business & Administrative Sciences University of Sargodha, Sargodha, Pakistan dba@uos.edu.pk Abstract The purpose of this study is to measure the conditional performance of equity mutual funds of Pakistan and to identify how far the management skills of the managers concerned qualify for superior stock selection and market timing abilities. The novelty of the study is based upon the initiality in the estimation of conditioned information of performance of equity mutual funds in the context of Pakistan. The current study captures the monthly returns of equity funds over the time period January 2011 to December 2013.Conditional performance model used by Christopherson, Ferson, and Glassman (1998) is employed to evaluate managerial abilities of fund managers. The results of the study report that most of the mutual funds do not disclose statistically significant results affirming the suggestion that the managers of Pakistan equity mutual funds lack the required stock selection and market timing abilities. The deficient role of the managers cannot provide the market premium to the investors and fails to beat the market consistently. The study has unearthed the facts as are useful for the mutual fund managers and investors for more pragmatic decisions while placing money in the funds. Keywords: Conditional Performance, Stock selection, Market timing, Equity funds, Pakistan. JEL Classification Codes: G11; G12 I. Introduction Mutual fund is a company that collects the money from investors with the intention of pooling this money in a fund with the help of expertise in fund management. To further its investment objectives, the mutual fund issues its own shares to the investors. Primarily, mutual funds are created to provide investors an opportunity of