The Size and Structure of the World Mutual Fund Industry


  • I would like to thank to an anonymous referee, John Doukas (the editor), Miguel Ferreira and António Freitas Miguel for helpful comments. All errors are of my responsibility. Financial support from Fundacao para a Ciencia e Tecnologia is greatly acknowledged (POCI/EGE/57002/2004).


This paper analyses the mutual fund industry for 20 countries using a new database of more than 50,000 mutual funds. The results suggest that more developed industries provide more benefits to investors as they diversify more internationally, charge lower annual charges and present more product sophistication. The results also have important policy implications by emphasising the role of competition and contestability in industry development. Fewer barriers to entry are positively associated with a larger industry, and concomitantly with more efficiency in terms of returns and fees.