Graph and download economic data for Domestic Financial Sectors; Mutual Fund Shares; Asset, Level (FBMFTTQ027S) from Q4 1945 to Q1 2025 about mutual funds, finance companies, IMA, companies, finance, financial, assets, and USA.

Graph and download economic data for Mutual Funds; Total Financial Assets, Market Value Levels (BOGZ1LM654090000Q) from Q4 1945 to Q1 2025 about mutual funds, assets, and USA.

In 2023, there were 7,222 mutual funds in the United States. This is a reasonable decline from the previous year, and reverses the upward trend of the preceding decade, most likely due to the economic effects of the global coronavirus (COVID-19) pandemic. What are mutual funds? Mutual funds are financial vehicles pulling investors’ money to buy a diversified portfolio of financial instruments. Depending on the investment fund strategy, defined in fund prospectus, mutual funds can invest money in different asset classes. These different fund types appeal differently to investors, depending on the economic climate. Some investment funds also take other factors into consideration. SRI (Socially Responsible Investment) funds, for example, only invest in companies engaging in socially- or environment-friendly activities. Mutual fund outlook Since 2000, over two in five U.S. households have owned mutual funds. Over the same period, the total net assets of these funds has more than doubled. This is likely because these funds provide an easy, relatively safe investment option that shows modest returns, which appeals to long-term investors such as those saving for retirement.

As of 2020, the most common financial goal of owning mutual funds among households in the United States was to save for retirement. In 2020, 94 percent of mutual fund-owning U.S. households stated this to be one of their financial goals, while 47 percent stated that they owned mutual funds in case of emergency .

Broad Based Index Fund Market Outlook

The global broad-based index fund market size was valued at USD 5.3 trillion in 2023 and is projected to reach USD 11.2 trillion by 2032, growing at a compound annual growth rate (CAGR) of 8.5% during the forecast period. This substantial growth is driven by increasing investor interest in passive investment strategies, along with the rising emphasis on cost-effective and diversified portfolio management.

The surge in demand for broad-based index funds can be attributed to several key growth factors. Firstly, the growing awareness and education about the benefits of passive investing over active management have played a significant role. Investors are increasingly leaning towards index funds due to their lower expense ratios, tax efficiency, and the ability to provide broad market exposure with minimal effort. Secondly, technological advancements and the rise of fintech have made these funds more accessible to a wider audience through online platforms and robo-advisors, democratizing investment opportunities for retail investors globally. Lastly, regulatory changes in many regions are encouraging greater transparency and lower fees in the financial services industry, which further bolsters the attractiveness of index funds as a preferred investment vehicle.

The popularity of broad-based index funds is also bolstered by their performance resilience during market volatility. Historical data indicates that while actively managed funds often struggle to outperform the market consistently, index funds tend to provide more stable returns over the long term. This trend has been particularly noticeable during economic downturns and periods of market uncertainty, where investors seek the relative safety and predictability offered by broad-based diversified portfolios. Additionally, the increased focus on retirement planning and the shift from defined benefit to defined contribution retirement plans have spurred the growth of index funds as they are often the preferred choice in retirement accounts due to their long-term growth potential and lower costs.

The regional outlook for the broad-based index fund market highlights significant growth potential across various geographies. North America, particularly the United States, remains the largest market for index funds, driven by the deep-rooted culture of investing and a well-established financial infrastructure. Europe follows closely, with growth fueled by regulatory support and increasing investor awareness. The Asia Pacific region is expected to witness the highest growth rate, propelled by the burgeoning middle class, rising disposable incomes, and increasing penetration of financial services. Latin America and the Middle East & Africa are also anticipated to demonstrate steady growth as financial markets in these regions continue to develop and mature.

Mutual Funds Sales have seen a notable uptick as investors increasingly seek diversified investment options that align with their financial goals. This trend is particularly evident in the context of broad-based index funds, where mutual funds offer a structured approach to investing in a wide array of assets. The appeal of mutual funds lies in their ability to pool resources from multiple investors, enabling access to a diversified portfolio that might otherwise be unattainable for individual investors. This collective investment model not only reduces risk but also provides investors with professional management and oversight. As the financial landscape evolves, mutual funds continue to play a crucial role in facilitating access to index funds, thereby driving sales and expanding their market presence.

Fund Type Analysis

Equity index funds represent a significant portion of the broad-based index fund market. These funds track a variety of stock indices, such as the S&P 500, NASDAQ, and MSCI World Index, providing investors with exposure to a wide array of equity markets. The appeal of equity index funds lies in their ability to offer broad market diversification at a low cost. Investors benefit from the lower fees associated with passive management and the reduced risk of individual stock selection. As a result, equity index funds have become a staple in both retail and institutional portfolios, driving robust demand and growth in this segment.

Bond index funds, though smaller in market share compared to their equity counterparts, are gaining traction as investors seek stable income and risk diversifi

As of 2020, most U.S. households who held investments in mutual funds were very or somewhat confident that these investments could help them achieve their financial goals. In 2020, ** percent of the households were very confident, and ** percent were somewhat confident. Five percent of mutual fund-owning households were not confident at all that such investments could help with their financial goals.

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Mutual Funds Market Size 2025-2029

The mutual funds market size is forecast to increase by USD 85.5 trillion, at a CAGR of 9.9% between 2024 and 2029.

The market is characterized by the significant growth of mutual fund assets in developing nations, driven by increasing financial literacy and expanding middle classes. This trend is fueled by the desire for diversified investment opportunities and the convenience of mutual funds as an investment vehicle. Asset managers must mitigate these risks through effective risk management software and practices and transparent communication with investors. However, these regions also pose risks such as political instability, regulatory uncertainties, and currency fluctuations. Banks, FIIs, insurance companies, and other financial institutions offer mutual funds, providing access to a diverse range of securities. Companies seeking to capitalize on market opportunities must navigate these challenges effectively by implementing robust risk management strategies and maintaining transparency with investors.
Additionally, they can explore partnerships with local financial institutions and offer tailored investment solutions to cater to the unique needs of developing markets. By focusing on risk mitigation and local market expertise, mutual fund providers can effectively tap into the vast potential of emerging markets and drive sustainable growth.

What will be the Size of the Mutual Funds Market during the forecast period?

Explore in-depth regional segment analysis with market size data - historical 2019-2023 and forecasts 2025-2029 - in the full report.
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In the ever-evolving mutual fund market, dynamics continue to unfold, shaping the landscape across various sectors. Index funds, with their passive investment strategy, have gained significant traction, challenging active management's traditional dominance. Performance measurement remains a critical focus, with benchmarks providing a yardstick for evaluation. Fund compliance adheres to regulations, ensuring transparency and fairness. Active management persists, with fund managers employing diverse investment strategies, from value investing to ESG and quantitative approaches. Fund holdings and returns are closely monitored, with tax implications and volatility influencing investor decisions. Fund advisory services offer guidance, while private equity and alternative investments broaden the investment universe.

Expense ratios and fund administration costs are under constant scrutiny, with risk management and fund distribution channels optimizing accessibility. The investment horizon, asset allocation, and fund ratings influence investor behavior. Fund sales, rebalancing, and redemption processes continue to evolve, ensuring flexibility for investors. Fund transparency and disclosure are paramount, with share classes catering to different investor needs. Hedge funds and mutual funds coexist, offering distinct investment opportunities. Fund prospectuses provide essential information, while marketing and comparison tools facilitate informed decisions. Investment objectives and reviews enable continuous improvement. The mutual fund market's continuous dynamism underscores the importance of adaptability and knowledge.

How is this Mutual Funds Industry segmented?

The mutual funds industry research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in 'USD trillion' for the period 2025-2029, as well as historical data from 2019-2023 for the following segments.

Type

  Stock funds
  Bond funds
  Money market funds
  Hybrid funds


Distribution Channel

  Advice channel
  Retirement plan channel
  Institutional channel
  Direct channel
  Supermarket channel


Geography

  North America

    US
    Canada


  Europe

    France
    Germany
    Italy
    Spain
    UK


  APAC

    Australia
    China
    India


  Rest of World (ROW)

By Type Insights

The stock funds segment is estimated to witness significant growth during the forecast period.

Mutual funds, specifically stock mutual funds, offer investors a diverse range of investment opportunities in corporate equities. These funds differ significantly, with various types catering to distinct investment objectives. For instance, growth funds focus on stocks with high growth potential, while income funds prioritize stocks yielding regular dividends. Index funds mirror a specific market index, such as the S&P 500, and sector funds invest in a particular industry sector. The mutual fund market is regulated, ensuring transparency and compliance with securities laws. Portfolio management plays a crucial role in selecting and managing the fund's holdings to achieve the investment strategy's objectives.

The fund's liquidity, represented by its ability to buy and sell shares, is essential for investors. Exchange-traded funds

Graph and download economic data for Money Market Funds; Total Financial Assets, Level (MMMFFAQ027S) from Q4 1945 to Q1 2025 about MMMF, IMA, financial, assets, and USA.

Graph and download economic data for Other Financial Intermediaries Except Insurance Companies, Pension Funds, Financial Auxiliaries and Captive Financial Institutions and Money Lenders; Equity and Investment Fund Shares Excluding Mutual Fund Shares and Money Market Fund Shares; Asset (IMA), Level (BOGZ1FL603081105Q) from Q4 1945 to Q4 2024 about pension, mutual funds, MMMF, IMA, equity, finance, insurance, investment, assets, and USA.

Graph and download economic data for Other Financial Intermediaries Except Insurance Companies, Pension Funds, Financial Auxiliaries and Captive Financial Institutions and Money Lenders; Equity and Investment Fund Shares Excluding Mutual Fund Shares and Money Market Fund Shares; Asset (IMA), Transactions (BOGZ1FU603081105Q) from Q4 1946 to Q1 2025 about pension, mutual funds, MMMF, IMA, equity, finance, transactions, insurance, investment, assets, and USA.

Graph and download economic data for Other Financial Intermediaries Except Insurance Companies, Pension Funds, Financial Auxiliaries and Captive Financial Institutions and Money Lenders; Equity and Investment Fund Shares Excluding Mutual Fund Shares and Money Market Fund Shares; Asset (IMA), Transactions (BOGZ1FU603081105A) from 1946 to 2024 about pension, mutual funds, MMMF, IMA, equity, finance, transactions, insurance, investment, assets, and USA.

Graph and download economic data for Financial business; mutual fund shares; asset, Revaluation/other changes in volume (DISCONTINUED) (FBMFSAA027N) from 1946 to 2012 about mutual funds, finance companies, IMA, companies, finance, financial, assets, and USA.

Graph and download economic data for Other Financial Business; Equity and Investment Fund Shares Excluding Mutual Fund Shares and Money Market Fund Shares; Liability, Transactions (BOGZ1FU503181105A) from 1946 to 2024 about fund shares, shares, mutual funds, MMMF, finance companies, companies, equity, finance, transactions, liabilities, investment, financial, and USA.

Graph and download economic data for Financial business; mutual fund shares; asset, Revaluation/other changes in volume (DISCONTINUED) (FBMFSAQ027S) from Q4 1946 to Q3 2013 about mutual funds, finance companies, IMA, companies, finance, financial, assets, and USA.

Graph and download economic data for Holding Companies; Equity and Investment Fund Shares Excluding Mutual Fund Shares and Money Market Fund Shares; Asset, Revaluation (BOGZ1FR733181105A) from 1946 to 2024 about fund shares, shares, revaluation, mutual funds, MMMF, companies, equity, investment, assets, and USA.

Graph and download economic data for Other Financial Intermediaries Except Insurance Companies and Pension Funds; Equity and Investment Fund Shares Excluding Mutual Fund Shares and Money Market Fund Shares; Asset (IMA), Revaluation (BOGZ1FR803081105A) from 1946 to 2024 about intermediaries, revaluation, pension, mutual funds, MMMF, IMA, equity, insurance, investment, assets, and USA.

Graph and download economic data for Domestic Financial Sectors; Equity and Investment Fund Shares Excluding Mutual Fund Shares and Money Market Fund Shares; Asset (IMA), Transactions (BOGZ1FU793081105A) from 1946 to 2024 about mutual funds, MMMF, IMA, equity, transactions, sector, investment, domestic, assets, and USA.

Graph and download economic data for Other Financial Intermediaries Except Insurance Companies and Pension Funds; Equity and Investment Fund Shares Excluding Mutual Fund Shares and Money Market Fund Shares; Asset (IMA), Revaluation (BOGZ1FR803081105Q) from Q4 1946 to Q1 2025 about intermediaries, revaluation, pension, mutual funds, MMMF, IMA, equity, insurance, investment, assets, and USA.

Graph and download economic data for Other Financial Business; Equity and Investment Fund Shares Excluding Mutual Fund Shares and Money Market Fund Shares; Liability, Market Value Levels (BOGZ1LM503181105Q) from Q4 1945 to Q1 2025 about fund shares, shares, mutual funds, market value, MMMF, finance companies, companies, equity, finance, liabilities, investment, financial, and USA.

Graph and download economic data for Mutual Funds; Total Financial Assets in Domestic Equity Funds, Level (BOGZ1FL654091603A) from 1991 to 2024 about mutual funds, equity, domestic, assets, and USA.