In this piece, we will take a look at the 15 biggest mutual fund companies in the world. For more mutual fund companies, head on over to 5 Biggest Mutual Fund Companies in the World.
The finance market of 2023 is significantly different from that a couple of decades back. There are numerous investment vehicles in which both ordinary and institutional investors can invest their funds and ensure a stable return. Some of the asset classes in which investors can place their money include equities, real estate, bonds, cryptocurrencies, commodities, and money market vehicles. These are broad categories since each of these has a variety of other investment options within them. For instance, the money market vehicle sector consists of several investment vehicles such as short term treasury bonds, commercial papers, money market mutual funds, deposit certificates, commercial papers, and repurchase agreements.
At the same time, while investors can simply pick and choose stocks of their choice for investment, there are other options as well that allow them to leverage professional expertise when allocating their money. Two kinds of investment vehicles that are commonly available are exchange traded funds and mutual funds. Out of these, the former is a collection of different shares with investment allocations based on a percentage whose single unit is sold throughout the trading day. The latter is also a basket of securities but is usually traded only once a day. There are several ways in which investors can profit from a mutual fund. These include making gains through an increase in the value of the fund itself, or through dividends, if the basket of securities that the fund invests in is made up of dividend paying stocks. Additionally, alongside stocks, mutual funds also invest in bonds, and some of the benefits that they offer include diversification, low costs, and liquidity.
Mutual funds are also some of the most popular investment vehicles in the U.S. According to statistics from ICI Global, more than half of American households owned a mutual fund last year. In numerical terms, this entails that 52.3% of the 68.6 million American households had owned mutual funds in 2022, leading to an approximate number of 115.3 million individuals having invested in the investment vehicles. More than two thirds of these were earning less than $150,000 annually, and 54% of the households holding mutual funds were led by individuals whose ages ranged between 35 and 64 years, and most of these were not making significant amounts of money, as the research also shows that the median household income of these individuals was $100,000. In statistics, the median of a data sample is its middle set of values, which removes the effects of outliers in reaching conclusions.
At the same time, the median income of these households was higher than the median income of all American households, which stood at $69,000 during the surveyed time period. The households that had owned mutual funds had higher education levels as well, with 80% having completed education higher than an Associate degree while the average American household saw only 66% with similar education levels. Finally, the majority, or 81%, of these investors had invested in stock market mutual funds, with money market mutual funds coming in at second place with 50% of households having invested in them.
In terms of market value, the U.S. mutual fund market is one of the biggest in the world. Data from Refinitiv shows that the U.S. fund market, made up of both ETFs and mutual funds, was worth $29.3 trillion as of December 2022. Fund returns last year matched the macroeconomic environment, with commodities funds posting an 8% annual return, while equity, taxable fixed income, and global equities dropped by 16.8%, 8.5%, and 12.8%, respectively. The turmoil in the financial market has continued this year as well, with the collapse of SVB Financial Group (NASDAQ:SIVB) reducing confidence in the banking system and causing an outflow of funds into the money market segment instead.
According to a report from the Financial Times, weekly inflows into money market funds crossed $120 billion during March 2023 in the aftermath of the SVB disaster, with $93 billion of funds flowing in just two days. The $120 billion in inflows was also almost half of the amount that has flown into money market funds this year, as FT estimates this figure to stand at $250 billion.
The sheer scale of the American mutual funds market is evident when we take a look at the global market. A research report from Technavio believes that the global funds market is estimated to grow by $71.6 trillion between 2022 and 2027, at a compounded annual growth rate (CAGR) of 9.76%. Out of the total market size, North America will be the largest contributor, as it will account for 52% of the total market.
So when should you invest in mutual funds? Fisher Investments' Ken Fisher believes that a key reason for buying a mutual fund is if you believe that the fund manager is a better investor than you are. He adds that:
If however, you have very small amounts of money, you can't do that (buy the same stocks as those tracked by the fund). Because the costs of the stocks still remain low, but if you have very small amounts of money, you can't diversify. And there's a huge benefit to diversification. So you can get that diversification through the ETF or the mutual fund, other things being equal, usually I would prefer the ETF to the mutual fund because it tends to be more tax efficient. Costs tend to be lower, but not necessarily lower.
Today, we'll look at some of the biggest mutual fund companies in the world, with the top ones being The Vanguard Group, Inc., BlackRock, Inc. (NYSE:BLK), and Fidelity Investments.
We used data from Morningstar's Fund Family reports for the U.S. and Europe to pick the biggest mutual fund companies in the world. While research for China was conducted, few pureplay Chinese players have their details publicly available, and since the entire Chinese mutual fund market is worth $3.9 trillion, the omission's effects are negligible.
The Charles Schwab Corporation (NYSE:SCHW) is an American bank headquartered in Westlake, Texas. It operates as a savings and loan company and has branches all over the U.S.
By the end of Q4 2022, 74 of the 943 hedge funds polled by Insider Monkey had bought The Charles Schwab Corporation (NYSE:SCHW)'s shares. The bank's largest investor is Rajiv Jain's GQG Partners which owns 7.3 million shares that are worth $1.4 billion.
Along with BlackRock, Inc. (NYSE:BLK), The Vanguard Group, Inc., and Fidelity Investments, The Charles Schwab Corporation (NYSE:SCHW) is one of the biggest mutual fund companies in the world.
14. MFS Investment Management
Fund Assets: $325 billion
MFS Investment Management is one of the oldest investment management companies in the mutual fund space. It was set up in 1924 and is headquartered in Boston, Massachusetts. The firm primarily invests in U.S. markets, through vehicles such as closed entry funds, and in foreign markets through American Depository Receipts (ADRs) and exchange traded funds (ETFs).
UBS Group AG (NYSE:UBS) is a Swiss based band that is headquartered in Zurich, Switzerland. It has personal banking, asset management, investment management, and corporate banking divisions.
Insider Monkey took a look at 943 hedge fund portfolios for last year's fourth quarter and found out that 16 had held a stake in the firm. UBS Group AG (NYSE:UBS)'s largest hedge fund shareholder in our database is Paul Marshall and Ian Wace's Marshall Wace LLP which owns 5.5 million shares that are worth $102 million, for a sizeable stake in one of the world's biggest mutual fund companies.
12. Pacific Investment Management Company, LLC
Fund Assets: $403 billion
Pacific Investment Management Company, LLC, also known as PIMCO, is an American firm headquartered in Newport Beach, California. It has investments in a variety of asset classes such as ETFs, hedge funds, private equity, and others. PIMCO is also one of the world's largest asset managers, with close to $2 trillion in assets under management (AUM).
11. Dimensional Fund Advisors, L.P.
Fund Assets: $433 billion
Dimensional Fund Advisors, L.P. is an investment firm based in Austin, Texas. The firm was set up in 1981 and it has dozens of mutual funds in its portfolio. Out of these, the Sustainability Targeted Value and Large Cap Growth are the strongest options, since they have posted 27.16% and 13.44% in returns since being set up.
JPMorgan Chase & Co. (NYSE:JPM) is the world's largest private bank in terms of total assets. It is headquartered in New York, New York.
100 of the 943 hedge funds surveyed by Insider Monkey during Q4 2022 had bought JPMorgan Chase & Co. (NYSE:JPM)'s shares. Its largest hedge fund investor is Ken Fisher's Fisher Asset Management through a $1 billion stake.
9. Amundi S.A. (EPA:AMUN.PA)
Fund Assets: $481 billion
Amundi S.A. (EPA:AMUN.PA) is a French investment management firm headquartered in Paris, France. It provides services to retail investors, pension funds, and others.
Franklin Resources, Inc. (NYSE:BEN) is an American firm that provides mutual funds through its subsidiaries. It is based in San Mateo, California, and is one of the biggest mutual fund companies in the world.
By the end of last year's fourth quarter, 23 of the 943 hedge funds surveyed by Insider Monkey had bought Franklin Resources, Inc. (NYSE:BEN)'s shares. Its largest investor is Prem Watsa's Fairfax Financial Holdings which owns one million shares worth $26 million.
Invesco Ltd. (NYSE:IVZ) manages ETFs, private funds, and mutual funds. It is headquartered in Atlanta, Georgia.
21 of the 943 hedge funds part of Insider Monkey's database had owned Invesco Ltd. (NYSE:IVZ)'s shares during Q4 2022. Nelson Peltz's Trian Partners is its largest investor through a $1 billion stake.
T. Rowe Price Group, Inc. (NASDAQ:TROW) is an investment manager that was set up in 1937 and is headquartered in Baltimore, Maryland.
Insider Monkey's December quarter of 2022 study covering 943 hedge funds revealed that 29 had bought the firm's shares. T. Rowe Price Group, Inc. (NASDAQ:TROW)'s largest investor is Ken Fisher's Fisher Asset Management which owns 779,816 shares that are worth $85 million.
The Vanguard Group, Inc., BlackRock, Inc. (NYSE:BLK) and Fidelity Investments are met by T. Rowe Price Group, Inc. (NASDAQ:TROW) in our list of the world's biggest mutual fund companies.
