According to a recent report published by Allied Market Research, titled, “Mutual Fund Assets Market by Fund Type, Distribution Channel, and Investor Type: Opportunity Analysis and Industry Forecast, 2020-2027,” the global mutual fund assets industry size was valued at $54.93 trillion in 2019, and is projected to reach $101.2 trillion by 2027, growing at a CAGR of 11.3% from 2020 to 2027.
Mutual fund is a type of investment vehicle, which collects money from a number of investors sharing a common investment objective. In addition, asset management companies, banks, agents, and brokers providing mutual fund services require investors to invest their money in equities, bonds, stocks, money market instruments, and other securities. Each investor owns units, which represent a portion of the holdings of the fund. Furthermore, income generated from this collective investment is distributed proportionately among investors after deducting certain expenses. Factors, such as implementation of digitalized technologies by key players, increased investment in mutual funds, and convenience of allocating funds & huge customized options for structuring portfolio, drive the growth of the mutual fund assets market. In addition, surge in government support & initiatives toward mutual funds and untapped potential of emerging economies are expected to provide lucrative opportunities for the mutual funds providers in the upcoming years.
Based on investor type, the institutional investor segment dominated the mutual fund assets market in 2019 and is projected to maintain its dominance during the forecast period. Institutional investors trades securities in huge quantities with a lower fee and trades & invests on behalf of their customers. As a result, these factors are therefore accelerating the growth of institutional investor segment in the market.
On the basis of distribution channel, the financial advisors/brokers segment dominated the mutual fund assets market in 2019 and is projected to maintain its dominance during the forecast period. This is attributed to the fact that financial advisors provide bundled product portfolios toward certain investments and usually execute trades in the financial markets by proxy for their clients. This is a major growth factor for the financial advisors/brokers segment in the distribution channel.
By region, the global mutual fund assets market was dominated by North America in 2019 and is expected to maintain this trend during the forecast period. Factors, such as quantitative easing, strong consumer spending, and low unemployment, drive the growth of the mutual fund assets market in the region. However, Asia-Pacific is expected to grow at the fastest CAGR during the forecast period due to increased adoption of mutual funds and growing consumer’s expectations for better returns on investment in the region.
The mutual fund assets industry has experienced moderate impact on revenue, owing to redemption pressures and weak liquidity of underlying assets, which have been at a risk during the COVID-19 pandemic. Moreover, due to the imposition of lockdowns & shutdowns, economies of several countries have slowed down. However, the global economy is anticipated to recover the loss incurred and gain profit by the third quarter of 2022. Therefore, economic slowdowns, huge unemployment, and stagnant income level occurred in the market resulted in moderate revenue growth for mutual fund providers globally.
Key findings of the study
- By fund type, the equity funds segment led the mutual fund assets market size, in terms of revenue in 2019.
- By distribution channel, the financial advisors/brokers segment accounted for the highest mutual fund assets market share in 2019.
- By region, North America generated the highest revenue in 2019.
The key players profiled in the mutual fund assets market analysis are BlackRock, Inc., BNP Paribas Mutual Fund, Capital Group, Citigroup Inc., Goldman Sachs, JPMorgan Chase & Co., Morgan Stanley, PIMCO, State Street Corporation, and The Vanguard Group, Inc. These players have adopted various strategies to increase their market penetration and strengthen their position in the industry.