How have global mutual funds grown relative to U.S.-based mutual funds?

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Expert Solution

Mutual Funds are pooled investment vehicles that can help an investor take exposure to multiple assets with very little money. It is one the best investment vehicles since it provides various benefits such as Diversification, Expert Management, Liquidity etc.

US is a developed economy where the concept of Mutual Funds has been known to the people for a long time. They have been comfortable with this vehicle and investing as per their need. It can be said that the penetration is already at a high level.

Other developing economies or Emerging Markets, who have started to open up such alternatives for their people have seen tremendous growth in the recent years. Take India for example: People were reluctant to invest in instruments other than Fixed Deposits and other government backed schemes earlier. But now with increased market awareness and good performance of such assets, more and more people are shifting to these instruments to achieve their financial goals. As per market data, the monthly inflow into Mutual Funds through SIP in India is more than $1 Billion. This figure was not even half 5 years ago.

Various other markets are promoting investments in these products to encourage integration of household savings into the market in the form of capital for corporates and government spending.

jeff jeffy answered 9 months ago

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