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60th edition

INVESTMENT COMPANY FACT BOOK

A Review of Trends and Activities in the Investment Company Industry

CHAPTER ONE

Worldwide Regulated Open-End Funds

Investors across the globe have demonstrated strong demand for regulated open-end funds (referred to in this chapter as regulated funds). In the past decade, net sales of regulated funds have totaled $14.4 trillion. This demand has been influenced by several long-term factors as well as cyclical and macroeconomic factors. Fund providers have responded to the increasing interest in funds by offering more than 122,500 regulated funds that provide a vast array of choices for investors. In many countries, markets for regulated funds are well-developed and highly competitive. At year-end 2019, regulated funds had $54.9 trillion in total net assets.

IN THIS CHAPTER

What Are Regulated Funds?

In this chapter, following standards set by the International Investment Funds Association (IIFA), regulated funds are defined as collective investment pools that are substantively regulated, open-end investment funds.* Open-end funds generally are defined as those that issue new fund shares (or units) and redeem existing shares (or units) on demand. Such funds are typically regulated with respect to disclosure, the form of organization (for example, as either corporations or trusts), custody of fund assets, minimum capital, valuation of fund assets, and restrictions on fund investments, such as limits on leverage, types of eligible investments, and diversification of portfolio investments.

In the United States, however, regulated funds include not only open-end funds (mutual funds and exchange-traded funds [ETFs]), but also unit investment trusts and closed-end funds. In Europe, regulated funds include Undertakings for Collective Investment in Transferable Securities (UCITS)—ETFs, money market funds, and other categories of similarly regulated funds—and alternative investment funds, commonly known as AIFs.

In many countries, regulated funds may also include institutional funds (funds that are restricted to being sold to a limited number of non-retail investors), funds that offer guarantees or protection of principal (those that offer a formal, legally binding guarantee of income or capital), and open-end real estate funds (funds that invest directly in real estate to a substantive degree).

 

* The primary data source for worldwide regulated funds is the IIFA. In 2019, the IIFA collected data on worldwide regulated funds from 47 jurisdictions. For data on individual jurisdictions, see section 8 of the data tables. For more details about the IIFA data collection, see Worldwide Definitions of Terms and Classifications.

Data for unit investment trusts and closed-end funds are not included in this chapter; these funds are discussed in chapter 2 and chapter 5, respectively.

Investor Demand for Worldwide Regulated Funds

Worldwide regulated funds have seen robust growth in total net assets in the past decade across the United States, Europe, Asia-Pacific, and the rest of the world. Rising demand for regulated funds has been driven by, among other factors, investors’ demand for professionally managed and well-diversified products offering access to capital markets and by the increasing depth and liquidity of global capital markets. In 2019, macroeconomic events and other factors—including how investors use regulated funds to help achieve their goals—played a considerable role in shaping global financial markets.

Total Net Assets of Worldwide Regulated Funds by Type of Fund

Substantial gains in global stock prices boosted the net asset growth of regulated funds in 2019. Net assets in worldwide regulated funds increased in 2019 by $8.2 trillion to $54.9 trillion (Figure 1.1).* Equity funds—which invest primarily in publicly traded stocks—remained the largest category of regulated funds, accounting for 45 percent of net assets at year-end 2019. Bond funds—which invest primarily in fixed-income securities—and mixed/other funds each made up 21 percent of net assets. And money market funds, which are generally defined throughout the world as regulated funds that are restricted to holding only short-term, high-quality money market instruments, accounted for 13 percent of net assets.

 

* In this chapter, unless otherwise noted, data for total net assets and net sales are denominated in US dollars.

Mixed/other funds include balanced/mixed funds, guaranteed/protected funds, real estate funds, and other funds.

FIGURE 1.1

Total Net Assets of Worldwide Regulated Open-End Funds Rose to $54.9 Trillion in 2019
Trillions of US dollars by type of fund, year-end
Figure 1.1 Total Net Assets of Worldwide Regulated Open-End Funds Rose to $54.9 Trillion in 2019

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* Mixed/other funds include balanced/mixed funds, guaranteed/protected funds, real estate funds, and other funds.

Note: Regulated open-end funds include mutual funds, ETFs, and institutional funds.

Source: International Investment Funds Association

The increase in net assets in 2019, especially in equity funds, was driven by several global factors. Chief among them was an easing of monetary policy across the globe, as well as a resumption of trade talks and the postponement of planned additional tariffs between the United States and China. In 2019, US stocks returned 31.0 percent (Figure 1.2). Stock markets elsewhere in the world also increased. For example, European stock markets returned 24.6 percent and the Asia-Pacific stock markets returned 19.7 percent, even when measured in US dollars. The euro, the Australian dollar, and the Chinese renminbi depreciated against the US dollar in 2019 by 2.2 percent, 0.4 percent, and 1.2 percent, respectively, reducing the value of assets denominated in these currencies when measured in US dollars (see here).

FIGURE 1.2

Stock Markets Rose Around the World in 2019
Percent
Figure 2 Stock Markets Rose Around the World in 2019

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1 The change in the exchange rate of euros is measured as the year-over-year percent change in the exchange rate of US dollars per euro.

2 The total return on US equities is measured as the year-over-year percent change in the Wilshire 5000 Total Market Index.

3 The total return on European equities is measured as the year-over-year percent change in the MSCI Daily Total Return Gross Europe Index (expressed in US dollars).

4 The total return on Asia-Pacific equities is measured as the year-over-year percent change in the MSCI Daily Total Return Gross AC Asia-Pacific Index (expressed in US dollars).

Sources: Bloomberg and MSCI

How Exchange Rates Can Influence Measurement of Total Net Assets Held by Worldwide Regulated Funds

For worldwide regulated funds holding assets denominated in currencies other than US dollars, fluctuations in US dollar exchange rates can significantly affect the value of these assets when they are expressed or measured in US dollars. For example, when foreign currencies depreciate against the dollar (or, equivalently, the US dollar appreciates against foreign currencies), it will have a negative impact on the value of assets not denominated in US dollars when those assets are measured in US dollars. Figure 1.3 illustrates this effect using two hypothetical scenarios.

FIGURE 1.3

Impact of Changes in the Exchange Rate on the US Dollar Value of a European Stock
Scenario 1: No change in exchange rate between euros and US dollars
 Year 1Year 2Percent change
1. Market value of European stock expressed in euros €100 €110 10%
2. Exchange rate of euros (US dollars per euro) 1.00 1.00 0%
3. Market value of European stock expressed in US dollars $100 $110 10%
Scenario 2: Market value if euro depreciates (US dollar appreciates)
 Year 1Year 2Percent change
4. Market value of European stock expressed in euros €100 €110 10%
5. Exchange rate of euros (US dollars per euro) 1.00 0.80 -20%
6. Market value of European stock expressed in US dollars $100 $88 -12%

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In the first scenario, the market value of a European stock, measured in euros, rises from €100 in year 1 to €110 in year 2, an increase of 10 percent. The exchange rate between US dollars and euros, in this scenario, is unchanged at 1.00 in both years. In other words, one euro is worth one US dollar in both years. To convert the euro-denominated value of the European stock into US dollars, multiply by the exchange value of the euro (US dollars per euro). Because this is 1.00 in both years, the value of the European stock expressed in US dollars is exactly the same as when expressed in euros: $100 in year 1 and $110 in year 2. When the US dollar exchange rate with another country is unchanged between two years, any gain or loss in assets denominated in that country’s currency translates into an identical percent gain or loss when the value of those assets is expressed in US dollars.

Exchange rates, however, rarely remain unchanged. The second scenario illustrates what happens when a European stock experiences the same 10 percent gain as in the first scenario (€100 in year 1 to €110 in year 2), but at the same time, the euro depreciates 20 percent against the US dollar. As in the first scenario, in year 1 the market value of a European stock expressed in US dollars is $100. In year 2, however, one euro is now worth 0.80 US dollars. To find the US dollar value of the European stock in year 2, multiply €110 by 0.80 (US dollars per euro) to get $88. The US dollar return on the European stock is now -12 percent—lower than in the first scenario because it accounts for the depreciation of the euro relative to the US dollar.

Worldwide Net Sales of Regulated Long-Term Funds

As asset prices rose over 2019, worldwide demand for regulated long-term funds (equity, bond, and mixed/other) as measured by net sales—total sales minus total redemptions plus net exchanges—strengthened. Worldwide net sales of regulated long-term funds increased from $975 billion in 2018 to nearly $1.5 trillion in 2019 with the improvement in overall demand for funds across the world (Figure 1.4). Net sales of long-term funds in the United States increased from $248 billion to $531 billion, in Europe from $327 billion to $473 billion, and in the Asia-Pacific region from $332 billion to $345 billion.

FIGURE 1.4

Net Sales of Regulated Open-End Long-Term Funds Increased in 2019
Billions of US dollars by region, annual
Figure 1.4 Net Sales of Regulated Open-End Long-Term Funds Increased in 2019

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Note: Regulated open-end funds include mutual funds, ETFs, and institutional funds. Long-term funds include equity funds, mixed/other funds (balanced/mixed, guaranteed/protected, real estate, and other funds), and bond funds, but exclude money market funds.

Source: International Investment Funds Association

As global stock prices surged during 2019, worldwide net sales of equity funds slowed to $67 billion (compared with $483 billion in 2018), and likely were affected by portfolio rebalancing to maintain target allocations among equity and bond funds (Figure 1.5). The largest declines in equity fund investment occurred in Europe and the United States, where outflows in 2019 were a combined $80 billion compared with a combined inflow of $214 billion in 2018. Equity funds in the Asia-Pacific region in 2019 also saw lower inflows of $113 billion, down from $239 billion in 2018. However, more than two-thirds of the inflows to equity funds in the Asia-Pacific region in 2019 were attributable to Japan, where demand for equity ETFs has been bolstered since 2013 by the Bank of Japan’s asset purchase program.

In contrast to equity funds, global net sales of bond funds jumped to more than $1 trillion in 2019, up from $243 billion in 2018 (Figure 1.5). The strong inflows into bond funds in 2019 likely reflected the continuing demographic shift of aging populations (see below), strong returns on bond funds, and portfolio rebalancing as returns on global stocks outpaced returns on bonds (see here). All regions saw increased demand for bond funds in 2019, with net sales in the United States jumping from $214 billion in 2018 to $581 billion in 2019, and Europe receiving inflows of $312 billion in 2019 following outflows of $31 billion in 2018. Bond funds in the Asia-Pacific region saw a smaller increase—inflows were $124 billion in 2019, up from $67 billion in 2018.

Combined net sales of bond funds and mixed/other funds have generally been strong over the past decade, and usually outpaced net sales of equity funds (Figure 1.5). This section will focus on two of the major factors that affected net flows during this time. First, some investors, such as those nearing retirement, may have reassessed their tolerance for investment risk. The global population is aging—in 2019, individuals aged 50 and older were estimated to represent 24 percent of the world’s population, up from 20 percent in 2008.* Some older investors may have elected to weight their purchases toward regulated funds with less-variable returns. Returns on bonds tend to be less variable than those on stocks. Because of this, returns on bond funds, and some mixed/other funds that hold substantial proportions of their total net assets in bonds, tend to be less variable than those of equity funds.

 

* United Nations, Department of Economic and Social Affairs, Population Division (2019). World Population Prospects (2019 Revision). Available at https://esa.un.org/unpd/wpp.

Second, investors were likely responding to favorable returns on bonds. In many countries, long-term interest rates declined during and after the 2007–2009 financial crisis. When interest rates fall, bond prices rise, boosting returns on bond funds and other funds that have substantial holdings of bonds, such as some mixed/other funds. Although long-term interest rates increased in the fourth quarter of 2019, they fell substantially in the first three quarters of 2019, reflecting increased uncertainty in the global economic outlook and downgrades of expected gross domestic product (GDP) growth rates by the International Monetary Fund (IMF). Although central banks in the United States and Europe loosened monetary policy during the second half of 2019 and interest rates on 10-year government bonds rose somewhat as market participants viewed the actions as beneficial to economic growth, long-term interest rates ended the year significantly lower than the level at which they started in 2019. For example, in the United States, the 10-year Treasury fell 77 basis points to 1.92 percent and the 10-year German Bund declined 49 basis points to -0.30 percent.

FIGURE 1.5

Worldwide Net Sales of Regulated Open-End Bond Funds Surged in 2019
Billions of US dollars by type of fund, annual
Figure 1.5 Worldwide Net Sales of Regulated Open-End Bond Funds Surged in 2019

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* Mixed/other funds include balanced/mixed funds, guaranteed/protected funds, real estate funds, and other funds.

Note: Regulated open-end funds include mutual funds, ETFs, and institutional funds. Long-term funds include equity funds, mixed/other funds, and bond funds, but exclude money market funds. Data for Ireland are included in mixed/other in 2010 and are distributed by type of fund from 2011 to 2019.

Source: International Investment Funds Association

Ongoing Charges for UCITS in the European Union

The UCITS Directive has become a global success story since it was first adopted in 1985. With stock markets around the world surging in 2019, net assets in UCITS domiciled in the European Union sharply increased by nearly 18 percent, from €8.7 trillion at year-end 2018 to €10.2 trillion at year-end 2019. Investments in these funds are held by investors from Europe and other jurisdictions worldwide.

UCITS provide many important advantages to European investors, including professional management services, access to global markets, the benefit of regulation and supervisory oversight, and access to a wide array of investment options via “passporting”—meaning that a UCITS established in one country can be sold cross-border into one or more other countries.

UCITS investors incur ongoing charges that cover a host of services, including portfolio management, administration, compliance costs, accounting services, legal costs, and payments to distributors. The total cost of these charges is disclosed to investors through either the total expense ratio (TER), often found in a UCITS’ annual report and other marketing documents, or the ongoing charges figure (OCF), found in the Key Investor Information Document (KIID). Ongoing charges among UCITS vary, and these differences depend on a variety of factors. Because ongoing charges are paid from fund assets, investors pay for these investment-related services indirectly.

On an asset-weighted basis, average ongoing charges paid by investors in equity and fixed-income UCITS have decreased since 2013 (Figure 1.6). In 2013, asset-weighted average ongoing charges for equity funds were 1.49 percent, or €1.49 for every €100 in assets. By 2018, the asset-weighted average had fallen to 1.29 percent. Asset-weighted average ongoing charges also declined for fixed-income funds, falling from 0.98 percent in 2013 to 0.79 percent in 2018. Average ongoing charges for mixed funds, which invest in a combination of equity and fixed-income securities, remained relatively stable over this period—1.45 percent in 2013 compared with 1.43 percent in 2018.

In each year from 2013 to 2018, the asset-weighted average ongoing charges for equity, fixed-income, and mixed funds were below their respective simple averages, illustrating that investors tend to concentrate their assets in lower-cost funds. For example, the simple average ongoing charge for equity funds was 1.51 percent in 2018 compared with an asset-weighted average of 1.29 percent. For fixed-income funds, the simple average was 1.04 percent compared with an asset-weighted average of 0.79 percent; and for mixed funds, the simple average was 1.51 percent compared with an asset-weighted average of 1.43 percent.

FIGURE 1.6

Investors in UCITS Pay Below-Average Ongoing Charges
Percent
Figure 1.6 Investors in UCITS Pay Below-Average Ongoing Charges

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Note: Data exclude exchange-traded funds.

Source: Investment Company Institute tabulations of Morningstar Direct data. See ICI Research Perspective, “Ongoing Charges for UCITS in the European Union.”

Worldwide Net Sales of Money Market Funds

Worldwide net sales of money market funds in 2019 totaled $706 billion, which was nine times the $79 billion inflow in 2018 (Figure 1.7). The sharp increase was largely driven by money market funds in the United States, where inflows were more than three times as great, from $182 billion in 2018 to $586 billion in 2019. In Europe, money market funds experienced inflows of $70 billion in 2019 after outflows of $22 billion in 2018, and Asia-Pacific money market funds registered $30 billion in inflows in 2019 after outflows of $99 billion in 2018.

Demand for money market funds depends on their relative performance and interest rate risk. When yields on short-term fixed-income securities are close to yields on long-term fixed-income securities, money market funds tend to experience inflows. In this situation, money market funds become attractive to some investors seeking to minimize their interest rate risk exposure by using a fund with a shorter duration.

As the US Treasury yield curve flattened and even inverted for a short period in 2019, investors exhibited a strong demand for US money market funds and short-term bond funds. Similarly, European money market funds experienced inflows as yield curves flattened in Europe during 2019. Finally, as yield spreads throughout the Asia-Pacific region narrowed or turned negative, money market funds in various countries in the region also started to experience inflows during 2019.

FIGURE 1.7

Worldwide Net Sales of Money Market Funds
Billions of US dollars by region, annual
Figure 1.7 Worldwide Net Sales of Money Market Funds

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Source: International Investment Funds Association

Number of Worldwide Regulated Funds

At year-end 2019, fund providers globally offered 122,528 regulated funds for sale, up 3.6 percent from 2018 and a 42 percent increase since 2010 (Figure 1.1). In 2019, 46 percent of these funds were domiciled in Europe (Figure 1.8). The Asia-Pacific region accounted for 29 percent of regulated funds, the United States for 8 percent, and the rest of the world for 17 percent. In 2019, 46 percent of regulated funds were mixed/other funds; equity funds accounted for 34 percent of regulated funds, bond funds for 18 percent, and money market funds for 2 percent.

FIGURE 1.8

Number of Worldwide Regulated Open-End Funds
Percentage of funds by region or type of fund, year-end 2019
Figure 1.8 Number of Worldwide Regulated Open-End Funds

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* Mixed/other funds include balanced/mixed funds, guaranteed/protected funds, real estate funds, and other funds.

Note: Regulated open-end funds include mutual funds, ETFs, and institutional funds.

Source: International Investment Funds Association

Total Net Assets of Worldwide Regulated Funds by Region

The total net assets of regulated funds vary widely by geographic region. These differences reflect preferences for specific asset classes, differences in risk tolerances, relative development of capital markets, demographics, macroeconomic developments, and other factors.

The United States and Europe are home to the world’s largest regulated fund markets. In 2019, the United States maintained its position as the world’s largest fund market, with $25.7 trillion, or 47 percent of the world’s $54.9 trillion in regulated fund total net assets (Figure 1.9). Funds domiciled in Europe held $18.8 trillion, or 34 percent of the worldwide total. The Asia-Pacific region had $7.3 trillion in total net assets, and $3.1 trillion was in funds domiciled in the rest of the world.

FIGURE 1.9

Total Net Assets of Worldwide Regulated Open-End Funds
Trillions of US dollars by region, year-end
Figure 1.9 Total Net Assets of Worldwide Regulated Open-End Funds

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Note: Regulated open-end funds include mutual funds, ETFs, and institutional funds.

Source: International Investment Funds Association

The relatively large size of the US market is the result of several factors. One is that US‑regulated funds have been available in the United States for around 100 years—for example, some mutual funds have been available to US investors since the 1920s. Another factor is the strong regulatory framework for securities markets and regulated funds in the United States that was established in the wake of the stock market crash of 1929 and the Great Depression—most notably, the Securities Act of 1933 and the Investment Company Act of 1940. Grounded in this sound framework, investor confidence in securities markets and regulated funds led to a steady growth in US-regulated funds’ assets.

In recent decades, US demand has also been fueled by the availability of regulated funds as investment options in tax-advantaged accounts (for example, 401(k) plans), and by a broad and growing availability of fund types that help investors meet their investment goals (for example, ETFs and target date funds). Also, assets of regulated funds in the past decade have been boosted by stock market appreciation and by reinvestment of dividends into funds.

Europe’s regulated fund market has grown briskly over the past few decades. One important factor helping to drive this growth is the UCITS regulatory framework, which includes passporting—the ability for funds domiciled in one EU country to be offered for sale and purchased by investors in another EU country. Additionally, many countries outside of Europe, such as in the Asia-Pacific region, allow UCITS to be offered for sale to their citizens. The pooling of assets from investors in a range of countries allows for economies of scale that help to lower the costs of funds to individual investors. The UCITS framework further promotes that asset pooling across countries by allowing an individual fund to offer share classes that are denominated in a range of different currencies (for example, euros, US dollars, British pounds sterling) and that are adapted to different tax structures across jurisdictions.

Finally, although the Asia-Pacific region had only 13 percent of the worldwide total net assets of regulated funds at year-end 2019, the market has been growing (Figure 1.9). Given the size of the population and the rapidly increasing economic development and wealth in many countries there, the region’s regulated fund market has potential for growth.

Factors Influencing Demand for Worldwide Regulated Funds

Research indicates that the size of the regulated fund market in a country or region depends on a broad range of factors, including access to well-developed capital markets, household demand for well-diversified investments, strong and appropriate regulation of funds and financial markets, availability of distribution structures that facilitate access to regulated funds, returns and costs of regulated funds relative to other available investment products, demographics, and high or improving levels of economic development.

Well-Developed Capital Markets

Demand for regulated funds is positively associated with the level of equity capital market development in a country. Residents of countries with more highly developed equity capital markets, such as the United States and those in the European Union, tend to hold a larger share of their household financial wealth in regulated funds.

Figure 1.10 illustrates the relationship between equity capital market development (a country’s stock market capitalization relative to its GDP) and the size of the regulated fund market across countries (total net assets in regulated long-term funds in a country relative to its GDP). The horizontal axis measures a country’s equity capital market development; the vertical axis plots the size of the regulated fund market in a given country.

Generally, as stock market capitalization rises relative to GDP, so do total net assets in regulated funds (Figure 1.10). Countries with more-developed equity capital markets—such as the United States, the United Kingdom, the Netherlands, or Switzerland—also tend to have a higher ratio of regulated long-term fund assets to GDP. For example, the Netherlands’ stock market capitalization exceeds its GDP (110 percent on the horizontal axis), indicating a highly developed equity capital market, while total net assets in regulated long-term funds are close to its GDP (94 percent on the vertical axis), indicating a well-developed fund industry. In contrast, countries with less-developed equity capital markets (lower ratios of stock market capitalization to GDP), such as Poland or China, tend to also have lower total net assets in regulated long-term funds relative to GDP.

FIGURE 1.10

Countries with More-Developed Equity Markets Tend to Have More-Developed Fund Industries
Percent, 2018
Figure 10 Countries with More-Developed Equity Markets Tend to Have More-Developed Fund Industries

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* Regulated open-end funds include mutual funds, ETFs, and institutional funds. Long-term funds include equity funds, mixed/other funds (balanced/mixed, guaranteed/protected, real estate, and other funds), and bond funds, but exclude money market funds.

Source: Investment Company Institute tabulations of data from the International Investment Funds Association, World Bank, World Federation of Exchanges, and Euronext

Other Factors Influencing Demand

Other factors also influence the demand for regulated funds, and therefore, the size of the regulated fund market. For example, Japan’s stock market capitalization is 107 percent of GDP, comparable to that of the Netherlands (Figure 1.10). Nevertheless, Japan has a substantially smaller amount of net assets in regulated long-term funds as a proportion of its GDP (34 percent). This outcome reflects Japanese households’ tendency to save in bank deposits rather than through investment in regulated funds.

Especially in countries such as Japan, where banks have historically dominated the financial landscape, households tend to hold more of their financial assets in bank products and less in regulated funds (Figure 1.11). For example, households in Japan hold more than half (53 percent) of their financial assets in bank deposits and currency but very little in regulated funds (4 percent). By contrast, in the United States, banks compete with capital market instruments for households’ financial assets; as a result, households hold a relatively small fraction (12 percent) of their assets in bank deposits compared with 22 percent in regulated funds. European countries are intermediate cases among industrialized nations, with 30 percent of households’ financial wealth in bank deposits and 8 percent in regulated funds. Differences in public policy and tax regimes across countries also likely have contributed to the dispersion of deposits and regulated funds held by households.

FIGURE 1.11

US Households Hold More of Their Wealth in Regulated Funds; Bank-Centric Countries Have a Lower Share
Percentage of households’ financial wealth,1 selected dates2
Figure 1.11 US Households Hold More of Their Wealth in Regulated Funds; Bank-Centric Countries Have a Lower Share

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1 Households’ financial wealth includes households and nonprofit institutions serving households.

2 Data for the United States and Japan are as of 2019:Q4; data for the European Union are as of 2019:Q3.

3 For the United States and Japan, regulated funds include total net assets held by mutual funds and ETFs. For the European Union, regulated funds include investment fund shares as defined by their respective systems of national accounts.

Source: Investment Company Institute tabulations of data from the International Investment Funds Association, Federal Reserve Board, Eurostat, and Bank of Japan

Size of Worldwide Regulated Funds in Global Capital Markets

Regulated funds are a growing source of capital for world financial markets, helping to finance businesses, governments, and household activities. As of year-end 2019, worldwide capital markets, as measured by the value of equity and debt securities outstanding, totaled $206.2 trillion (Figure 1.12). Net assets of regulated funds constituted 27 percent ($54.9 trillion) of the $206.2 trillion in worldwide capital markets.

The share of worldwide capital markets held by regulated funds has grown over the past decade. In 2010, worldwide regulated funds held 20 percent of worldwide capital markets, rising to 27 percent in 2019. The remaining 73 percent of worldwide capital markets in 2019 were held by a wide range of other investors, such as central banks, sovereign wealth funds, defined benefit pension plans, banks, insurance companies, hedge funds, broker-dealers, and households’ direct holdings of stocks and bonds.

FIGURE 1.12

Worldwide Regulated Open-End Fund Share of Worldwide Equity and Debt Markets
Trillions of US dollars, year-end
Figure 1.12 Worldwide Regulated Open-End Fund Share of Worldwide Equity and Debt Markets

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* Data for worldwide debt markets are as of September 30, 2019.

Note: Regulated open-end funds include mutual funds, ETFs, and institutional funds.

Source: Investment Company Institute tabulations of data from the International Investment Funds Association, World Federation of Exchanges, and Bank for International Settlements