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

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 1 year ago

For many investors,mutual funds have become the investment of choice. Describe why investors purchase mutual funds.

Write a paper on how hedge funds are different from mutual funds?

Describe early immigration policies of the U.S.. How have restrictions grown out of domestic and international...

Describe early immigration policies of the U.S.. How have restrictions grown out of domestic and international pressures? How has the call for more open boarders grow out of domestic and international pressures?

Explain how characteristics vary among mutual funds

What are the long-term performance records of equity mutual funds relative to benchmarks, linking your answer...

What are the long-term performance records of equity mutual funds relative to benchmarks, linking your answer to the AUM growth of passive investing? Explain the fee structure and operating expense trends of mutual funds.

Researchers find that actively managed equity mutual funds in U.S. do not outperform their benchmarks on...

Researchers find that actively managed equity mutual funds in U.S. do not outperform their benchmarks on average. Based on this evidence, would you adopt active or passive portfolio management strategy? Why?

You are considering investing in one of Fidelity's mutual funds. Based on the information provided in...

You are considering investing in one of Fidelity's mutual funds. Based on the information provided in the prospectus, you believe the expected return of this Fidelity fund is 0.12 and its expected standard deviation is 0.32. Assume Treasury bill (risk-free security) currently returns 0.03 per year and you have estimated that your risk aversion coefficient, A, is 4. What is the optimal weight, y*, of this Fidelity mutual fund (risky portfolio) in your final complete portfolio? (The optimal weight refers...

In recent years, large financial institutions such as mutual funds, investment bank and pension funds have...

In recent years, large financial institutions such as mutual funds, investment bank and pension funds have become the dominant owners of stock in the United States. The research shows that about 73% of ownership in large U.S. corporates are held by these institutional investors. In German, the dominant shareholders are usually Investment Bank. Moreover, these institutions are becoming more active in corporate affairs. What are the implications of this trend for agency problem and corporate control?

25. Researchers find that actively managed equity mutual funds in U.S. do not outperform their benchmarks...

25. Researchers find that actively managed equity mutual funds in U.S. do not outperform their benchmarks on average. Based on this evidence, would you adopt active or passive portfolio management strategy? Why?

The average annual total return for U.S. Diversified Equity mutual funds from 1999 to 2003 was...

The average annual total return for U.S. Diversified Equity mutual funds from 1999 to 2003 was 4.1%. A researcher would like to conduct a hypothesis test to see whether the returns for mid-cap growth funds over the same period are significantly different from the average for U.S. Diversified Equity funds. A sample of 40 midcap growth funds provides a mean return of 3.4%. Assume that the population standard deviation for mid-cap growth funds is known from previous studies to be...

Question