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This research aims to comprehensively analyze the interplay between insider ownership, institutional ownership (INSO), and dividend policy within Pakistani Islamic mutual funds. It specifically explores how ownership structures influence dividend payout strategies within the framework of Islamic finance. The study employs panel data analysis to investigate the effect of insider and institutional ownership on dividend payouts, utilizing a sample of 98 Islamic mutual funds in Pakistan. The research shows insignificant effect of “institutional ownership” on the dividend distribution policy of Pakistani Islamic investment funds. In contrast, insider ownership exerts a significant and positive influence. This shows that when insider ownership increases by 1%, dividend payments increase by 0.0117%. Stakeholders in Pakistan's Islamic finance sector should carefully consider these findings. This study be a factor to the existing literature by exploring the connection between insider, institutional ownership and dividend policy specifically in the context of Pakistani Islamic investment funds. It sheds light on how ownership affects mutual fund payout policies. The results have practical implications for investors, particularly when considering funds with a higher proportion of insider ownership. Regulators can use these insights to strengthen dividend policies in mutual funds and improve corporate governance mechanisms. In addition, this research expands current knowledge on corporate governance, insider, institutional ownership and dividend policy, with a focus on Islamic finance and the Pakistani market.

Keywords: Ownership Structure, Dividend Payout Policy, Corporate Governance, Islamic Mutual Funds.