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Mutual funds Market size is estimated to grow by USD 71.62 trillion between 2022 and 2027 accelerating at a CAGR of 9.76% during the forecast period. The growth of the market depends on several factors, including market liquidity, increasing share of financial savings in total household savings, and rising awareness-growing the investor base.
This mutual funds market research report extensively covers market segmentation by type (stock funds, bond funds, money market funds, and hybrid funds), distribution channel (advice channel, retirement plan channel, institutional channel, direct channel, and supermarket channel), and geography (North America, Europe, APAC, South America, and Middle East and Africa).
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Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The market liquidity plays a significant role in driving mutual funds market share growth. Liquidity refers to the ease of buying or selling an asset quickly and efficiently without significantly impacting its price. Mutual funds are a prime example of a highly liquid financial market due to their composition and trading volume.
Mutual funds typically invest in companies of various sizes, with larger companies offering greater liquidity. Furthermore, these funds provide investors with a wide range of highly liquid assets, including stocks and fixed-income securities. The liquidity of mutual funds offers several advantages, such as easy fund switching and flexibility during market volatility. As a result, the market is expected to experience growth during the forecast period due to its high liquidity and associated benefits.
An emerging trend in the market is the growth of mutual fund assets in developing nations. This growth can be attributed to the strong performance of equity markets and increased net inflows to equity schemes in these countries. For example, in India, the average assets under management (AAUM) of the mutual fund sector reached INR 36.17 trillion (USD 0.48 trillion) by the end of December 2021, marking a substantial 30% increase from the previous year.
Both individual and institutional investors witnessed a rise in the value of their assets held by mutual funds in 2022 compared to 2021. This indicates a promising opportunity that is expected to drive the growth of the mutual fund market during the forecast period.
Transaction risks are major challenges impeding market growth. Transaction risks arise when a company makes financial transactions or holds accounts in a currency other than its own currency. For example, a Canadian company doing business in China is exposed to exchange rate risk because it accepts financial transactions in the Chinese yuan and presents its financial statements in Canadian dollars. The risks that a company faces when conducting financial transactions between countries are called transaction risks.
The risk is that the exchange rate will change before the transaction is completed. The duration between transaction and settlement is essentially a source of transaction risks. In general, if you sell mutual funds when the foreign currency has strengthened against the dollar, you can make a profit. On the other hand, if the fund's currency or target index fell against the dollar, it will result in a loss. Such transaction risks may hinder the growth of the market during the forecast period
The mutual funds report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Mutual Funds Market Customer Landscape
Vendors are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Aditya Birla Management Corp. Pvt. Ltd. - The company offers viscose staple fiber, metals, cement, viscose filament yarn, branded apparel, carbon black, chemicals, fertilizers, insulators, financial services, and telecom. The key offerings of the company include mutual funds.
The report also includes detailed analyses of the competitive landscape of the market and information about 15 market vendors, including:
Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
The market share growth by the stock funds segment will be significant during the forecast period. Stock mutual funds provide investors with exposure to corporate stocks. There are various types of stock funds, each with its own investment strategy. For instance, growth funds focus on stocks that have the potential for significant financial gains but may not pay regular dividends. Income funds, on the other hand, invest in stocks that offer regular dividends. Index funds track specific market indices, such as the Standard and Poor 500 Index, while sector funds concentrate on a specific industry sector.
Stock funds are also categorized based on the proportion of investment in the mutual fund. For example, large-cap funds invest a minimum of 80% of their assets in equity shares of large-cap companies, which are the top 100 companies in terms of market capitalization. These funds provide stability and the potential for respectable returns. Mid-cap funds allocate a minimum of 65% of their holdings to equity shares of mid-cap companies, offering higher volatility and the potential for better returns compared to large-cap funds.
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The stock funds segment was valued at USD 45.08 trillion in 2017 and continued to grow until 2021. Large- and mid-cap funds invest a minimum of 35% of their assets in both large-cap and mid-cap companies. The remaining 30% can be invested in other equities or debt and money market components as permitted by regulatory authorities. Small-cap funds invest at least 65% of their assets in equity shares of small-cap companies, which are typically more volatile but offer potential returns. Multi-cap funds invest across large-cap, mid-cap, and small-cap companies based on market conditions, providing investors with a diversified portfolio across different market capitalizations.Stock funds are suitable for investors seeking exposure to the stock market and pursuing long-term investment goals. They offer the opportunity for capital growth and wealth accumulation over time.
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North America is estimated to contribute 52% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
The market in North America accounted for a major market share in 2022. This rise is attributed to continuous trading activities in the region and the large presence of the equity market in the US. Tax efficiency, transparency, and the ability to gain access to a centralized stock exchange platform make it a lucrative security option for investors. As most investors on the stock exchange are cost sensitive, they look for low-cost brokerage options. This makes more buyers invest in mutual funds to eliminate the cost of brokerage commissions. With mutual funds, buyers have the option to individually manage and sell stocks on the stock exchange. This should increase transparency in trading activities and allow easy communication between traders. Moreover, as liquidity in some of the fixed-income markets has declined, investors are showing more interest in mutual funds. All such factors are expected to drive regional mutual funds market growth during the forecast period.
The real economy of North America has shown to be unexpectedly durable. Beginning with a sharp decrease in 2020 in GDP and increasing unemployment brought on by COVID-19, 2021 saw a return to economic slumber. The recovery was even more obvious in the financial markets, as share prices progressively increased until they reached levels that were 34% higher than their pre-COVID-19 highs by the end of August 2021. Such factors will boost market growth during the forecast period.
The report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
Mutual Funds Market Scope |
|
Report Coverage |
Details |
Page number |
156 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 9.76% |
Market growth 2023-2027 |
USD 71.62 tn |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
8.24 |
Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
Performing market contribution |
North America at 52% |
Key countries |
US, China, Australia, Germany, and France |
Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
Key companies profiled |
Aditya Birla Management Corp. Pvt. Ltd., Amundi Austria GmbH, Baroda BNP Paribas Asset Management India Pvt. Ltd., BlackRock Inc., BNY Mellon Securities Corp., Canara Robeco Asset Management Co., DSP Investment Managers Pvt. Ltd., Edelweiss Asset Management Ltd., FMR LLC, Franklin Templeton, HDFC Ltd., ICICI Prudential Asset Management Co. Ltd., IDFC Mutual Fund, JPMorgan Chase and Co., State Street Global Advisors, The Capital Group Companies Inc., The Charles Schwab Corp., The Vanguard Group Inc., Axis Asset Management Co. Ltd., and PIMCO |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this report to meet your requirements. Get in touch
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Market Segmentation by Distribution Channel
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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