Good credit: Shifting consumer preferences toward exchange-traded funds will support industry demand

The Open-End Investment Funds industry has grown only marginally in recent years, despite substantial growth in financial markets. Industry revenue growth was slower than overall asset growth as operators have been forced to lower fees to meet shifting consumer preference. The US bull market that has benefited the industry since 2012 is likely to continue in 2018, as the value of the S&P 500 is expected to increase. Additionally, the biggest shift for the industry over the past five years has been evolving investor preference for exchange-traded funds (ETFs). ETFs generally have lower fees and more liquidity than mutual funds...purchase to read more.

Industry Statistics & Market Size
Revenue
$150bn
Annual Growth 13-18
0.6%
Forecast Growth 18-23
Profit
Employment
130,568
Businesses
12,133

Industry Threats & Opportunities

  • The biggest shift for the industry has been evolving investor preference for exchange-traded funds
  • Expenses incurred by mutual fund investors have fallen
  • During the five-year period, industry assets are forecast to grow
  • Industry Report - Starting a New Business Chapter

    Prior turmoil in financial markets is expected to increase barriers to entry because investors are more likely to seek the relative security of large and long-established funds. Simultaneously, greater consolidation of financial institutions has coincided with the emergence of some very large asset managers. For example, BlackRock doubled their market share with the acquisition of Barclays Global Investors in 2009. The largest funds have bigger and more diverse distribution channels and marketing and sales resources. This feat cannot easily be replicated because the National Association of Securities Dealers Inc. limits the amount of money that can be spent on marketing and advertising to 0.75% of a fund's annual average net assets. Giv...purchase to read more.

    Additional Insights for the Open-End Investment Funds Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Open-End Investment Funds Industry are

  • Having an extensive distribution network
  • Having a good reputation
  • Establishment of brand names
  • IBISWorld analysts also discuss how external factors such as S&P 500 and Yield on 10-year Treasury note in the Open-End Investment Funds industry impact industry performance..

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    What's in this report

    What is the Open-End Investment Funds Industry?

    This industry comprises legal entities (funds) that earn fees by pooling and investing money, giving the investors rights to a proportional share of the fund performance. Ownership shares of these funds are sold to the public in initial public offerings with additional shares offered continuously. Investors redeem the shares at prices determined by the fund’s net asset value or market value. This report focuses on mutual funds and exchange-traded funds.

    Industry Products
  • Money market funds
  • Equity funds
  • Hybrid funds
  • Bond funds
  • ETFs
  • Industry Activities
  • Sponsoring and offering equity funds
  • Sponsoring and offering bond funds
  • Sponsoring and offering money market funds
  • Sponsoring and offering exchange-traded funds
  • Sponsoring and offering hybrid funds
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • S&P 500
  • Yield on 10-year Treasury note
  • Investor uncertainty
  • Personal savings rate
  • Regulation for the Investment Management industries

  • Current Performance
  • Volatile markets make for volatile revenue
  • Declining fees and changing client characteristics
  • Fund sponsors and employment
  • Chart: Revenue Growth

  • Industry Outlook
  • ETF dominance
  • Growing importance of investment companies
  • Table: Open-End Investment Funds Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Open-End Investment Funds Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Retirement & Pension Plans
  • Consumers

  • Key Selling Industries
  • Financial Planning & Advice
  • Portfolio Management
  • Securities Brokering
  • Stock & Commodity Exchanges

  • Products & Services
  • Equity funds
  • Bond funds
  • Money market funds
  • ETFs
  • Hybrid funds
  • Chart: Open-End Investment Funds Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Generation X
  • Baby Boomers
  • Millennials
  • GI Generation
  • Nonfinancial Institutions
  • Financial Institutions
  • Other (including nonprofits)
  • Chart: Major Market Segmentation for the Open-End Investment Funds Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Profit
  • Wages and depreciation
  • Other
  • Chart: Cost Structure Benchmarking – Sector vs Open-End Investment Funds

  • Basis of Competition
  • Internal competition
  • External competition

  • Barriers to Entry
  • Table: Barrier to Entry Checklist for the Open-End Investment Funds Industry

  • Industry Globalization
    Vanguard Group Inc., Fidelity Investments Inc., Capital Group Companies Inc.,
  • Table: Vanguard Group Inc. - financial performance
  • Table: Fidelity Investments Inc. - financial performance
  • Table: Capital Group Companies Inc. - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Open-End Investment Funds Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Open-End Investment Funds Industry
    Includes:
  • Industry Revenue (2009-2023)
  • Industry Gross Product (2009-2023)
  • Establishments (2009-2023)
  • Businesses (2009-2023)
  • Employment (2009-2023)
  • Wages (2009-2023)
  • S&P 500 Index (2009-2023)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Table: Industry Financial Ratios
    Exchange-Traded Funds
  • An investment vehicle that is traded on a stock exchange much like a stock.
  • Individual Retirement Account
  • An investing tool used by individuals to earn funds for retirement savings. There are several types of IRAs, including traditional IRAs and Roth IRAs.
  • Liquidity
  • The degree to which an asset or security can be easily bought or sold quickly in the market without impacting the asset's price. Liquidity is characterized by a high level of trading activity.
  • Target Date Fund
  • Also known as a "lifestyle fund," assets are managed to a more conservative risk tolerance as the target date (usually retirement) approaches.
  • What Our Customers Say

    Why buy this report?

    The Open-End Investment Funds Industry Research Report measures market size, analyses current and future trends, and provides an indication of market share for the industry’s largest companies. IBISWorld’s collection of industry market research reports gives you insightful, up-to-date information on the supply chains, economic drivers, and key buyers and markets for hundreds of industries.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
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    This report on Open-End Investment Funds:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Open-End Investment Funds market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Open-End Investment Funds, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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