The global mutual fund assets market is poised for remarkable growth over the next decade, with projections indicating that it will soon surpass the trillion-dollar mark. According to the latest market analysis, the market value of mutual fund assets is expected to expand at an impressive annual pace of 11% from 2023 to 2030.
Market Analysis in Brief
Mutual funds, renowned financial vehicles that pool investments from a diverse range of individuals, have gained prominence as a means to invest in various securities, including money market funds, bonds, stocks, and other assets. Offering both small and individual investors access to professional performance assessments of securities, mutual funds allow stakeholders to share fairly in both profits and losses. These funds can be categorized into equities (stocks), money market funds (short-term debt), fixed-income (bonds), or balanced or hybrid funds, which encompass both stocks and bonds.
Key Report Findings
- The mutual fund assets market is poised to experience a twofold increase in revenue between 2023 and 2030.
- Increased mutual fund investments, enabling participation in investment plans for both small and large fund savers, is a key driver of market growth.
- Equity funds continue to be in high demand in the mutual fund assets market.
- The banking sector currently holds the largest share of mutual fund assets market revenue as of 2022.
- North America is expected to maintain its leadership in the market, while Europe is projected to witness the strongest growth through 2030.
Growth Drivers
Rising Mutual Fund Investments and Digital Technology Adoption
The proliferation and allocation of funds into profitable assets, combined with a focus on domestic savings and discretionary income, are influencing mutual fund investments. Mutual funds provide opportunities for investors of all scales to participate in investment plans and benefit from the capital markets growth. The mutual fund industry has been at the forefront of adopting new technologies such as Robo-advisors, Artificial Intelligence (AI), blockchain, cloud computing, and big data analytics. These technologies streamline processes, boost efficiency, simplify access to complex services, and reduce costs and risks within the sector.
Supportive Government Initiatives
Governments, regulatory agencies, and other authorities in various nations are expected to support and advance the mutual fund industry, often entering agreements with e-wallets, e-commerce distributors, and similar platforms to promote growth. Distributors of mutual funds are actively supported by their governments to expand their product offerings, enhancing the quality and depth of relationships between channel partners and contributing to mutual fund providers income growth.
Increasing Preference as a Chosen Investment for Wealth Generation
Mutual fund investments are gaining popularity due to their potential for compounding, quick liquidity, transparency, and relatively low initial commitments. Diversification and risk reduction further enhance their appeal. This trend is expected to continue as mutual fund providers cater to both small- and large-scale clients with advantageous investment options, driven by growing domestic savings, increased after-tax income, and other significant factors.
Growth Challenges
Unpredictable Financial Market Environment, High Expenses, and Sales Charges
The highly unpredictable capital market environment poses challenges for mutual funds to consistently deliver satisfactory returns to clients. High expense ratios and sales charges can reduce returns and have led some investors to explore alternative investment strategies like individual equities or exchange-traded funds (ETFs). To address these challenges, companies must focus on cost reduction, performance improvement, and offering value-added services to attract investors.
Overview of Key Segments
Equity Funds Remain the Most Popular Category
Equity funds are expected to maintain a significant market share due to their focus on investing in stocks and shares of businesses. The segments growth is driven by attributes such as professional money management, diversification, systematic investments, and ongoing analysis of fund holdings.
Bond Funds Witness Fastest Growth
Bond funds have witnessed rapid growth, offering investors the advantages of strong liquidity, varied term structures, and relatively low volatility compared to stocks. Bonds are considered a safer investment, particularly for risk-averse investors.
Banks Dominate Mutual Fund Distribution
Banks play a crucial role in promoting the mutual fund sector, providing trust, backend support, and other valuable resources. Their dominance is expected to continue as they are more trusted than other distribution channels.
Growth Opportunities Across Regions
North America Accounts for Over 30% Market Share
North America is projected to maintain its dominant position in the market due to the longstanding popularity of mutual funds in the region. Equity mutual funds, in particular, are preferred by North American investors, driven by their potential for higher returns.
Asia Pacific Poised for Significant Growth
Asia Pacific is expected to experience substantial growth by 2030, driven by the evolving financial markets, relaxed investment policies, and increasing awareness of mutual fund schemes in the region.
Mutual Fund Assets Market: Competitive Landscape
Prominent players in the mutual fund assets market include Fidelity Investments, Morgan Stanley, Goldman Sachs, Pimco, Capital Group, Citigroup Inc., Blackrock, Inc., State Street Corporation, JPMorgan Chase & Co., The Vanguard Group, Inc., and BNP Paribas Mutual Fund.
Global Mutual Fund Assets Industry Analysis, Size, Share, Growth, Trends, Regional Outlook, and Forecast 2023-2030 (By Fund Type Coverage, By Distribution Channel Coverage, By Investor Type Coverage, By Geographic Coverage and Leading Companies) https://www.fairfieldmarketresearch.com/report/mutual-fund-assets-market
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COMTEX_440910078/2840/2023-09-25T13:12:27