The Global Menu of Funds

47 Pages Posted: 9 Sep 2019

See all articles by Sebastien Betermier

Sebastien Betermier

McGill University - Desautels Faculty of Management

David Schumacher

McGill University

Ali Shahrad

McGill University, Desautels Faculty of Management

Date Written: August 8, 2019

Abstract

We provide the first aggregate perspective on the evolution of mutual fund offerings worldwide. Applying textual analysis to the names of over 39,000 equity mutual funds sold in 77 different countries between 1931 and 2016, we find that the dimensionality of the fund menu is small: 20 common words appear in over 50% of the fund names, and 10 categories are sufficient to classify over 85% of all funds. Moreover, the menu of funds available in each country converges over time to a common (“global”) menu. We trace this surprisingly simple and uniform process of global menu convergence to the actions of individual fund families who follow similar growth paths: small families start by offering funds with more unique names but progressively conform to the main style categories as they grow. Our results shed new light on the aggregate process of financial innovation and the industrial organization of the asset management industry that appears to produce the same “wholesale” menu around the world.

Keywords: Fund Families, Menu Proliferation, International Markets

JEL Classification: G15, G23, L1

Suggested Citation

Betermier, Sebastien and Schumacher, David and Shahrad, Ali, The Global Menu of Funds (August 8, 2019). Available at SSRN: https://ssrn.com/abstract=3444235 or http://dx.doi.org/10.2139/ssrn.3444235

Sebastien Betermier

McGill University - Desautels Faculty of Management ( email )

1001 Sherbrooke St. West
Montreal, Quebec H3A1G5 H3A 2M1
Canada

David Schumacher (Contact Author)

McGill University ( email )

1001 Sherbrooke St. W
Montreal, Quebec H3A 1G5
Canada
5143984778 (Phone)

HOME PAGE: http://www.davidschumacher.info

Ali Shahrad

McGill University, Desautels Faculty of Management ( email )

1001 Sherbrooke St. West
Montreal
Canada

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