Mega funds continue to dominate universe

Less then 1% of some 65,000 mutual funds sold globally controlled 45% of global assests of $23trn according to data to 30 June published by Propinquity, the strategic research and advice provider to asset managers.

Even more focused has been the impact of so-called mega funds, defined as those with total net assets of $5bn or more, which have been responsible for almost half, 48.1%, of the industry’s global growth in the past decade. That is just 634 funds, according to Propinquity’s research.

Most of these are sold in the US – 446 out of 634 – representing some $8.5trn out of $10.2trn in mega fund asests. The US market is particularly concentrated: these funds account for 68.7% of total mutual fund assets in that market. In Europe by contrast, such funds account for just 16.9% of assets.

Another trend spotted is the importance of passive funds in concentrating assets. As of the second quarter of 2016 passive funds made up about a quarter, 25.8% of global mega fund assets. But they made up just 15.1% of the overall global mutual fund universe.

As of Q2 2016, the average passive mega fund has $40.1bn in assets. The active mega fund averages $13.4bn, suggesting that economies of scale are biggest in passive strategies.

To read the full research click here: Propinquity-Mega-Funds-Q2-2016

 

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