Mutual Fund Industry Competition And Concentration

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The Mutual Fund Industry

Author : R. Glenn Hubbard
Publisher : Columbia University Press
ISBN 13 : 0231151829
Total Pages : 254 pages
Book Rating : 4.2/5 (311 download)

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Book Synopsis The Mutual Fund Industry by : R. Glenn Hubbard

Download or read book The Mutual Fund Industry written by R. Glenn Hubbard and published by Columbia University Press. This book was released on 2010 with total page 254 pages. Available in PDF, EPUB and Kindle. Book excerpt: Mutual funds form the bedrock of retirement savings in the United States, and, considering their rapid growth over recent decades, are sure to become even more financially critical in the coming decades. Because the size of fees paid by investors to mutual fund advisers can strongly affect the return on investment, these fees have become contentious in Congress and the courts, with many arguing that investment advisers grow rich at the expense of investors. This groundbreaking book not only conceptualizes a new economic model for the industry but uses this model to test price competition between investment advisers. Its highly experienced authors track the growth of the industry over the past twenty-five years and present the arguments and evidence both for and against theories of adviser malfeasance, as well as the assertion that market forces fail to protect investors' returns from excessive fees. The volume briefly reviews the regulatory history of mutual fund fees and leading case decisions addressing excessive fees. It also reveals the extent to which the governance structure of mutual funds impacts fund performance. There is no greater text for those who seek to understand today's mutual fund industry, including investors, money managers, fund directors, securities lawyers, economists, and those concerned with regulatory policy toward mutual funds

Mutual Fund Industry Competition and Concentration

Author : Miguel A. Ferreira
Publisher :
ISBN 13 :
Total Pages : 54 pages
Book Rating : 4.:/5 (129 download)

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Book Synopsis Mutual Fund Industry Competition and Concentration by : Miguel A. Ferreira

Download or read book Mutual Fund Industry Competition and Concentration written by Miguel A. Ferreira and published by . This book was released on 2009 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines mutual fund industry competition and concentration in 27 countries using a sample of almost 50,000 mutual funds. The indicators show that the mutual fund industry is concentrated worldwide and some industries present large fund complexes. Countries with common law and higher stock market turnover are associated with low level industry concentration. There is more industry contestability in countries with better quality of institutions and where regulation is more open. Bank concentration and simultaneous restrictions to engage new activities in the financial industry tend to decrease firm entry in the mutual fund industry. The launch of new funds is positively related with openness of regulation and negatively related with industry age. The overall level of fees tend to be higher in countries with low stock market turnover, where industry size is smaller and where foreign mutual fund companies have a larger market share. Moreover, fund proliferation seems to be an important aspect of competition as it is negatively related with mutual fund fees. Overall, the results do not indicate a direct relation between competition and concentration, similar to the findings for the banking industry. Nevertheless, our evidence validates the contention that the degree of competition is important for the variety of products as we find a larger offer of funds in more competitive industries.

The Economics of Mutual Fund Markets: Competition Versus Regulation

Author : William Baumol
Publisher : Springer Science & Business Media
ISBN 13 : 9400921853
Total Pages : 250 pages
Book Rating : 4.4/5 (9 download)

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Book Synopsis The Economics of Mutual Fund Markets: Competition Versus Regulation by : William Baumol

Download or read book The Economics of Mutual Fund Markets: Competition Versus Regulation written by William Baumol and published by Springer Science & Business Media. This book was released on 2012-12-06 with total page 250 pages. Available in PDF, EPUB and Kindle. Book excerpt: The original impetus for this research was provided several years ago by a request to assist Counsel for Fidelity Management and Research Corporation in analyzing the mutual fund industry, with particular emphasis on money market mutual funds. We were asked to focus our efforts on the mechanism by which the advisory fees of mutual funds are determined. This request arose out of litigation that challenged the level of advisory fees charged to the shareholders of the Fidelity Cash Reserve Fund. Subsequently, we were asked to provide similar assistance to Counsel for T. Rowe Price Associates regarding the fees charged to shareholders of their Prime Reserve Fund. 1940, advisers of Under the Investment Company Act of mutual funds have a fiduciary duty with respect to the level of fees they may charge a fund's shareholders. Since the passage of the Investment Company Act, there have been numerous lawsuits brought by shareholders alleging that advisory fees were excessive. In these lawsuits, the courts have failed to provide a set of standards for determining when such fees are excessive. Instead, they have relied on arbitrary and frequently ill-defined criteria for jUdging the reasonableness of fees. This failure to apply economic-based tests for evaluating the fee structure of mutual funds provided the motivation for the present book, which undertakes a comprehensive analysis of the economics of the mutual fund industry.

The Economics of Mutual Fund Markets: Competition Versus Regulation

Author : William Baumol
Publisher : Springer
ISBN 13 : 0792390431
Total Pages : 242 pages
Book Rating : 4.7/5 (923 download)

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Book Synopsis The Economics of Mutual Fund Markets: Competition Versus Regulation by : William Baumol

Download or read book The Economics of Mutual Fund Markets: Competition Versus Regulation written by William Baumol and published by Springer. This book was released on 1989-12-31 with total page 242 pages. Available in PDF, EPUB and Kindle. Book excerpt: The original impetus for this research was provided several years ago by a request to assist Counsel for Fidelity Management and Research Corporation in analyzing the mutual fund industry, with particular emphasis on money market mutual funds. We were asked to focus our efforts on the mechanism by which the advisory fees of mutual funds are determined. This request arose out of litigation that challenged the level of advisory fees charged to the shareholders of the Fidelity Cash Reserve Fund. Subsequently, we were asked to provide similar assistance to Counsel for T. Rowe Price Associates regarding the fees charged to shareholders of their Prime Reserve Fund. 1940, advisers of Under the Investment Company Act of mutual funds have a fiduciary duty with respect to the level of fees they may charge a fund's shareholders. Since the passage of the Investment Company Act, there have been numerous lawsuits brought by shareholders alleging that advisory fees were excessive. In these lawsuits, the courts have failed to provide a set of standards for determining when such fees are excessive. Instead, they have relied on arbitrary and frequently ill-defined criteria for jUdging the reasonableness of fees. This failure to apply economic-based tests for evaluating the fee structure of mutual funds provided the motivation for the present book, which undertakes a comprehensive analysis of the economics of the mutual fund industry.

Competition in the Mutual Fund Industry

Author : John C. Coates
Publisher :
ISBN 13 :
Total Pages : 61 pages
Book Rating : 4.:/5 (226 download)

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Book Synopsis Competition in the Mutual Fund Industry by : John C. Coates

Download or read book Competition in the Mutual Fund Industry written by John C. Coates and published by . This book was released on 2007 with total page 61 pages. Available in PDF, EPUB and Kindle. Book excerpt: "Since 1960 the mutual fund industry has grown from 160 funds and $18 billion in assets under management to over 8,000 funds with $10.4 trillion in assets. Yet critics, including Yale Chief Investment Officer David Swensen, Vanguard founder Jack Bogle, and New York Governor Eliot Spitzer, call for more fund regulation, claiming that competition has not protected investors from excessive fees. Starting in 2003, the number of class action suits against fund advisors increased sharply, and, consistent with critics' views, some courts have excluded or treated skeptically evidence of competition and comparable fees of other funds. Skepticism about fund competition dates to the 1960s, when the SEC accepted the view that market forces fail to constrain advisory fees, in part because fund boards rarely fire advisors. In this article, we show that economic theory, empirical evidence, and careful analysis of the laws and institutions that shape mutual funds refute this view. Fund critics overlook the most salient characteristic of a mutual fund, redeemable shares. While boards rarely fire advisors, fund investors may fire advisors at any time by redeeming shares and switching into other investments. Industry concentration is low, new entry is common, barriers to entry are low, and empirical studies -- including new evidence presented in this article -- show higher advisory fees significantly reduce fund market shares, and so constrain fees. Fund performance is consistent with competition exerting a strong disciplinary force on funds and fees. Our findings lead us to reject the critics' views in favor of the legal framework established by ʹ36(b) of the Investment Company Act and the lead case interpreting that law (the Gartenberg decision), while suggesting Gartenberg is best interpreted to allow the introduction of evidence regarding competition between funds"--Preface.

Competition in the Mutual Fund Industry

Author : Coates, IV (John C.)
Publisher :
ISBN 13 :
Total Pages : 68 pages
Book Rating : 4.:/5 (129 download)

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Book Synopsis Competition in the Mutual Fund Industry by : Coates, IV (John C.)

Download or read book Competition in the Mutual Fund Industry written by Coates, IV (John C.) and published by . This book was released on 2011 with total page 68 pages. Available in PDF, EPUB and Kindle. Book excerpt: Since 1960 the mutual fund industry has grown from 160 funds and $18 billion in assets under management to over 8,000 funds with $10.4 trillion in assets. Yet critics - including Yale Chief Investment Officer David Swensen, Vanguard founder Jack Bogle, and New York Governor Eliot Spitzer - call for more fund regulation, claiming that competition has not protected investors from excessive fees. Starting in 2003, the number of class action suits against fund advisors increased sharply, and, consistent with critics' views, some courts have excluded or treated skeptically evidence of competition and comparable fees of other funds. Skepticism about fund competition dates to the 1960s, when the SEC accepted the view that market forces fail to constrain advisory fees, in part because fund boards rarely fire advisors. In this article, we show that economic theory, empirical evidence, and careful analysis of the laws and institutions that shape mutual funds refute this view. Fund critics overlook the most salient characteristic of a mutual fund: redeemable shares. While boards rarely fire advisors, fund investors may fire advisors at any time by redeeming shares and switching into other investments. Industry concentration is low, new entry is common, barriers to entry are low, and empirical studies - including new evidence presented in this article - show higher advisory fees significantly reduce fund market shares, and so constrain fees. Fund performance is consistent with competition exerting a strong disciplinary force on funds and fees. Our findings lead us to reject the critics' views in favor of the legal framework established by sect;36(b) of the Investment Company Act and the lead case interpreting that law (the Gartenberg decision), while suggesting Gartenberg is best interpreted to allow the introduction of evidence regarding competition between funds.

Industrial Dynamics and the Evolution of Markets in the Mutual Fund Industry

Author : Andreas Mattig
Publisher : Springer Science & Business Media
ISBN 13 : 3834983519
Total Pages : 248 pages
Book Rating : 4.8/5 (349 download)

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Book Synopsis Industrial Dynamics and the Evolution of Markets in the Mutual Fund Industry by : Andreas Mattig

Download or read book Industrial Dynamics and the Evolution of Markets in the Mutual Fund Industry written by Andreas Mattig and published by Springer Science & Business Media. This book was released on 2010-12-01 with total page 248 pages. Available in PDF, EPUB and Kindle. Book excerpt: The asset management, and more specifically the mutual fund industry, is facing major strategic challenges. Although the market is growing overall, its growth attracts a steady stream of new entrants and new products that jeopardize the position and profitability of (large) incumbent firms. In order to cope with this setting, Andreas Mattig focuses on a holistic market model to sketch the mutual fund industry structure. This allows to propose a new measurement approach and to track the industrial dynamics. Based on these theoretical contributions, he concentrates on governance aspects and moulds the results into a practice-oriented strategic framework.

Mutual Fund Performance Persistence and Competition

Author : Aneel Keswani
Publisher :
ISBN 13 :
Total Pages : 33 pages
Book Rating : 4.:/5 (129 download)

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Book Synopsis Mutual Fund Performance Persistence and Competition by : Aneel Keswani

Download or read book Mutual Fund Performance Persistence and Competition written by Aneel Keswani and published by . This book was released on 2005 with total page 33 pages. Available in PDF, EPUB and Kindle. Book excerpt: Existing work on mutual fund performance persistence has obtained diverse results, depending on the group of funds studied. We examine whether performance persistence within a peer group of competing mutual funds depends on the group's composition. The UK mutual fund industry is ideal for such an examination, because funds compete within strictly defined sectors. We consider several sector-level attributes related to the intensity of competition within a sector and use them to explain sector-level persistence. We find robust evidence that persistence is higher in sectors where concentration of assets under management is higher. Our results indicate that the competitiveness of a mutual fund sector influences persistence in the relative performance of its members.

Macro Attractiveness and Micro Decisions in the Mutual Fund Industry

Author : Gunnar Lang
Publisher : Springer Science & Business Media
ISBN 13 : 3642397247
Total Pages : 185 pages
Book Rating : 4.6/5 (423 download)

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Book Synopsis Macro Attractiveness and Micro Decisions in the Mutual Fund Industry by : Gunnar Lang

Download or read book Macro Attractiveness and Micro Decisions in the Mutual Fund Industry written by Gunnar Lang and published by Springer Science & Business Media. This book was released on 2013-10-11 with total page 185 pages. Available in PDF, EPUB and Kindle. Book excerpt: This volume addresses the attractiveness of financial centers with a primary focus on the mutual fund industry. It uses different empirical analysis approaches in an attempt to disentangle the reasons for location attractiveness and in order to identify its influence on fund pricing. The presented research tackles an issue that is fundamental to the understanding of organizational behavior in finance – the rationale in the decision-making process of market participants and its consequences for an economy.

Competition and Change in the Mutual Fund Industry

Author : Erik R. Sirri
Publisher :
ISBN 13 :
Total Pages : 34 pages
Book Rating : 4.:/5 (279 download)

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Book Synopsis Competition and Change in the Mutual Fund Industry by : Erik R. Sirri

Download or read book Competition and Change in the Mutual Fund Industry written by Erik R. Sirri and published by . This book was released on 1992 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Competition and Structure of the Mutual Fund Industry in Spain

Author : María Isabel Cambón
Publisher :
ISBN 13 :
Total Pages : 44 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis Competition and Structure of the Mutual Fund Industry in Spain by : María Isabel Cambón

Download or read book Competition and Structure of the Mutual Fund Industry in Spain written by María Isabel Cambón and published by . This book was released on 2019 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: In industries where consumers prefer to make all their purchases from a single company (for example, a supermarket), companies tend to offer a greater variety of products. With that strategy, they succeed in making their market share in the industry grow and gaining market power. This behaviour is also typical of the financial industry, where consumers usually prefer to concentrate all their financial operations in a single entity. In Spain, the big growth of mutual funds since 1995 and the model of universal banking suggest the existence of these cross-effects on demand (spillovers). In this paper, we provide empirical evidence of the presence of these effects in the Spanish mutual fund market. Moreover, these effects are strong-er than in the US market. The intensity of the effects appears to be greater in the retail mutual fund segment than in the wholesale segment. This result would be consistent with the relative increase in the number of funds offered by fund managers, the higher fees charged, and the stronger degree of concentration of fund families found in the retail segment.

Mutual Fund Industry Handbook

Author : Lee Gremillion
Publisher : John Wiley & Sons
ISBN 13 : 1118428722
Total Pages : 295 pages
Book Rating : 4.1/5 (184 download)

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Book Synopsis Mutual Fund Industry Handbook by : Lee Gremillion

Download or read book Mutual Fund Industry Handbook written by Lee Gremillion and published by John Wiley & Sons. This book was released on 2012-06-22 with total page 295 pages. Available in PDF, EPUB and Kindle. Book excerpt: "The Mutual Fund Industry Handbook is a remarkably important work . . . I am profoundly impressed by the broad and comprehensive sweep of information and knowledge that this book makes available to industry participants, college and business school students, and anyone else with a serious interest in this industry." -- From the Foreword by John C. Bogle President, Bogle Financial Markets Research Center Founder and former chief executive, The Vanguard Group A Foreword by John C. Bogle, founder of The Vanguard Group and one of the most respected leaders in the mutual fund industry, sets the stage for this authoritative book that explains the complexities of the phenomenal industry in simple terms. Investors like the fact that mutual funds offer professional management, easy diversification, liquidity, convenience, a wide range of investment choices, and regulatory protection. Mutual Fund Industry Handbook touches on all of those features and focuses on the diverse functions performed in the day-to-day operations of the mutual fund industry. You'll learn about: Front-office functions-analysis, buying, and selling. Back-office functions, including settlement, custody, accounting, and reporting. Commission structures-front-end loads, back-end loads, or level loads. The various fund categories used by the Investment Company Institute, Morningstar, and Lipper. The roles played by fund managers, investment advisors, custodial banks, distributors, transfer agents, and other third-party service providers. If you want a definitive reference on the mutual fund industry, this is the book for you.

Mutual Funds in India

Author : Rakesh Kumar
Publisher : Partridge Publishing
ISBN 13 : 148287508X
Total Pages : 178 pages
Book Rating : 4.4/5 (828 download)

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Book Synopsis Mutual Funds in India by : Rakesh Kumar

Download or read book Mutual Funds in India written by Rakesh Kumar and published by Partridge Publishing. This book was released on 2016-07-07 with total page 178 pages. Available in PDF, EPUB and Kindle. Book excerpt: The services of the asset management companies are getting important for the investors, for assessing markets and investing funds are beyond the capacity of most individuals. Hence, the role of mutual fund firms in India has increased enormously in response to liberal policy regime in the recent decades. This book is an endeavour to study the various facets of the mutual fund industry to understand the complexities therein. The structure, organisation, and competition in the mutual fund industry in India have been discussed in depth. Performance of mutual fund schemes by using conditional and unconditional models has been evaluated, and investors may derive enough inkling towards their future investment plans. After going through this book, the reader is expected to develop confidence while dealing with the instruments of mutual funds.

Pooling Money

Author : Yasuyuki Fuchita
Publisher : Brookings Institution Press
ISBN 13 : 0815701667
Total Pages : 151 pages
Book Rating : 4.8/5 (157 download)

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Book Synopsis Pooling Money by : Yasuyuki Fuchita

Download or read book Pooling Money written by Yasuyuki Fuchita and published by Brookings Institution Press. This book was released on 2010-01-01 with total page 151 pages. Available in PDF, EPUB and Kindle. Book excerpt: A Brookings Institution Press and Nomura Institute of Capital Markets Research publication One of the first rules of investing is diversification: spreading resources over many types of investments in order to minimize financial risk. Mutual funds have been the diversification vehicle of choice for the last several decades. In recent years, however, other opportunities for diversification—such as separately managed accounts and exchange-traded funds—have enjoyed rapid growth. What lies ahead for the mutual fund industry in light of this increasingly competitive environment? In this volume, experts from the United States and Japan look at forces of change in their securities markets and offer their views of the future for mutual funds and other forms of securities diversification. Contributors include Harold Bradley (Kauffman Foundation), Koichi Iwai (Nomura Institute of Capital Markets Research),Ajay Khorana (Georgia Institute of Technology),Allan Mostoff (Mutual Fund Directors Forum), Brian Reid (Investment Company Institute), Henri Servaes (London Business School), Paula Tkac (Federal Reserve Bank of Atlanta), and Peter Wallison (American Enterprise Institute).

Product Differentiation, Search Costs, and Competition in the Mutual Fund Industry

Author :
Publisher :
ISBN 13 :
Total Pages : 45 pages
Book Rating : 4.:/5 (524 download)

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Book Synopsis Product Differentiation, Search Costs, and Competition in the Mutual Fund Industry by :

Download or read book Product Differentiation, Search Costs, and Competition in the Mutual Fund Industry written by and published by . This book was released on 2003 with total page 45 pages. Available in PDF, EPUB and Kindle. Book excerpt:

The Economics of Mutual Fund Markets

Author : William J. Baumol
Publisher :
ISBN 13 :
Total Pages : 236 pages
Book Rating : 4.:/5 (33 download)

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Book Synopsis The Economics of Mutual Fund Markets by : William J. Baumol

Download or read book The Economics of Mutual Fund Markets written by William J. Baumol and published by . This book was released on 1990 with total page 236 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Product Differentiation, Search Costs, and Competition in the Mutual Fund Industry

Author : Ali Hortacsu
Publisher :
ISBN 13 :
Total Pages : 65 pages
Book Rating : 4.:/5 (129 download)

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Book Synopsis Product Differentiation, Search Costs, and Competition in the Mutual Fund Industry by : Ali Hortacsu

Download or read book Product Differentiation, Search Costs, and Competition in the Mutual Fund Industry written by Ali Hortacsu and published by . This book was released on 2010 with total page 65 pages. Available in PDF, EPUB and Kindle. Book excerpt: Two salient features of the competitive structure of the U.S. mutual fund industry are the large number of funds and the sizeable dispersion in the fees funds charge investors, even within narrow asset classes. Portfolio financial performance differences alone do not seem able to fully explain these features. We investigate whether non-portfolio fund differentiation and information/search frictions also play a role in creating these observed industry characteristics. We focus on their impact in a case study of the retail Samp;P 500 index funds sector. We find that fund proliferation and price dispersion also exist in this sector, despite the funds' financial homogeneity. Furthermore, there was a marked shift in sector assets to more expensive (often newly entered) funds throughout our sample period. Our analysis indicates that these observations are consistent with the presence of both non-portfolio differentiation and information/search frictions. Structural estimation of a novel search-over-differentiated-products model reveals that reasonable magnitudes of investor search costs can explain the considerable price dispersion in the sector, and consumers seem to value funds'' observable attributes such as fund age and the number of other funds in the same fund family in largely plausible ways. The results also suggest that the substantial increase in mutual fund market participation observed during our sample, and the corresponding purchase decisions of novice investors, drove the shift in assets toward more expensive funds. We also find evidence consistent with the presence of switching costs, as distinct from search costs. Using structural estimates of demand parameters and search costs, we investigate the possibility that there are too many sector funds from a social welfare standpoint. The results of this exercise indicate that restricting entry would yield nontrivial gains from reduced search costs and productivity gains from scale economies, but these may be counterbalanced by losses from increased market power and reduced product variety.