Globalisation and the Global Growth of Long-Term Mutual Funds

Plantier, L. Christopher. 2014. ‘Globalisation and the Global Growth of Long-Term Mutual Funds.’ ICI Global Research Perspective 1, no. 1 (March).

44 Pages Posted: 7 Apr 2014 Last revised: 31 May 2014

Date Written: March 31, 2014

Abstract

Around the globe, the mutual fund industry has seen strong growth in assets in the past two decades. Global assets in mutual funds increased from $4.0 trillion in 1993 to $28.9 trillion in September 2013, reflecting increases in each of four broad regions: the United States, Europe, Asia-Pacific, and the rest of the world. An array of factors helps explain the worldwide growth in long-term mutual fund assets and the varied growth experiences across individual countries. These factors include strong and appropriate regulation; investors’ demand for professionally managed, well-diversified products offering access to capital markets; deep and liquid capital markets within a given country; favourable returns on capital market instruments; a country’s economic development, demographics, and fiscal balance; and whether a country has a defined contribution plan system that allows plan participants to invest in mutual funds. Mutual funds become an increasingly important financial intermediary as a country’s economy develops. A cross-country statistical analysis shows that the ratio of long-term mutual fund assets to gross domestic product tends to grow as a country’s per capita income rises, its stock market capitalisation and turnover increase, and the size of its defined contribution assets relative to GDP rises.

Suggested Citation

Plantier, L. Christopher, Globalisation and the Global Growth of Long-Term Mutual Funds (March 31, 2014). Plantier, L. Christopher. 2014. ‘Globalisation and the Global Growth of Long-Term Mutual Funds.’ ICI Global Research Perspective 1, no. 1 (March). , Available at SSRN: https://ssrn.com/abstract=2421131

L. Christopher Plantier (Contact Author)

Wells Fargo, N.A. ( email )

Phoenix, AZ 85029
United States
7037953102 (Phone)

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