Fees and expenses in the mutual funds industry are a hot topic for investors and market observers around the world. In some cases discussions are going so far that one could get the impression that fees and expenses are the only criteria an investor should use when selecting a mutual fund or ETF. These discussions have recently been fueled by media coverage of the launches of some low-cost funds by large asset management groups. Fees and expenses, especially for actively managed funds, have been under scrutiny for a while, since a large number of actively managed funds have not beaten

Global GDP growth, strong corporate earnings, and a synchronized recovery further propped up international markets in Q4, keeping world equity issues at the top of the performance charts; the developed international markets funds macro-group witnessed the largest absolute increase (+$102.4 billion) in TNA for Q4, rising 4.64% to $2.3 trillion.

For the quarter 82 of Lipper’s 96 equity and mixed-equity fund classifications posted positive returns. For the second quarter in a row the World Equity Funds macro-classification (+6.06%) outpaced Lipper’s other three broad equity groupings.

Lipper’s fund macro-groups (including both mutual funds and exchange-traded funds [ETFs]) saw over $19 billion leave their coffers for the fund-flows week ended Wednesday, January 18. This marked the third straight weekly net outflows for U.S. funds; they have failed to post an increase yet in 2017. Money market funds (-$18.0 billion) and equity funds (-$3.1 billion) accounted for all the weekly net outflows, while taxable bond funds (+$1.5 billion) and municipal bond funds (+$512 million) both managed to take in net new money. The broad-based equity indices took a downturn during the week as investors started to question some

Municipal bond mutual funds took in net new money (+$790 million) for the fund-flows week ended January 11, marking the first net inflows for the group since Donald Trump was elected to be the next president of the United States. During the eight-week slide muni bond funds saw their coffers shrink just over $17 billion. Interestingly, this mini-slump came almost directly on the heels of the group’s second longest streak of weekly net inflows ever (54 weeks), during which time it had positive net flows of $32.6 billion. Muni bond funds posted their third largest quarterly outflow ever (-$22.7 billion)

European Fund-Flow Trends, October 2016 October showed a slightly positive picture for the European fund industry, with equity funds (-€3.5 bn) being the only asset type facing net outflows in the long-term funds segment during the month. The inflows on the other side of the table seemed to be somewhat shy. Mixed-asset funds (+€4.6 bn) were the best selling asset type of long-term funds for October, followed by bond funds (+€2.7 bn), “other” products (+€0.3 bn), real estate funds (+€0.2 bn), alternative UCITS products (+€0.1 bn), and commodity products (+€0.04 bn). These fund flows added to overall net inflows of

Lipper’s fund macro-groups (including both mutual funds and exchange-traded funds [ETFs]) experienced net outflows of $7.7 billion for the fund-flows week ended Wednesday, October 19. Three of the four fund macro-groups saw money leave their coffers: money market funds, equity funds, and municipal bond funds suffered negative flows of $7.7 billion, $3.3 billion, and $136 million, respectively. Taxable bond funds (+$3.4 billion) were the lone group taking in net new money for the week. The S&P 500 Index broke a two-week losing streak, managing to post a slim 0.24% gain this past week. The index turned the tide toward the

Lipper’s fund macro-groups (including both mutual funds and exchange-traded funds [ETFs]) experienced net outflows of $13.4 billion for the fund-flows week ended Wednesday, September 7. Money market funds, which have had net outflows of more than $15 billion in three of the last four weeks, were responsible for the lion’s share of negative flows; they saw $17.5 billion leave their coffers. Equity funds (-$271 million) also contributed to the overall net outflows, while taxable bond funds (+$3.4 billion) and municipal bond funds (+$986 million) both took in net new money. After two consecutive down weeks the S&P 500 Index recorded

Total net assets (TNA) in the conventional funds business (not including exchange-traded products [ETPs] and variable insurance products [VIPs]) remained above the $15-trillion mark for Q2, rising $211 billion from Q1 2016.

After seven consecutive years of annual net inflows exchange-traded funds (ETFs) in Thomson Reuters Lipper’s European Region Funds classification have experienced significant net outflows for year to date 2016. The group has seen $8.8 billion leave this year after taking in almost $53 billion of net new money for the seven previous years combined. This ETF group has suffered net outflows for the last 15 weeks and for 17 of the 19 weeks so far in 2016. European region mutual funds have also seen money leave their coffers this year, but not to the extent the ETFs side has. European

Even though the European mutual funds industry enjoyed overall net inflows of €244.1 billion into long-term mutual funds during the first half of 2014, it seems the industry is still in a consolidation mode at the product level. During second quarter 2014 the European fund industry created 518 new funds, but there were 402 funds liquidated and 257 merged during the same period. This means the fund universe in Europe declined by 141 funds; a total of 659 funds (402 liquidations and 257 mergers) were withdrawn from the European fund market, while only 518 new products were launched. Figure 1:

There are various examples in the investment industry of funds that show outstanding performance losing their superiority in terms of relative performance when their assets under management (AUM) increase. This effect is known as “reversion to the mean” and raises the question of whether a fund can become too big. On the other hand, we also see every quarter a number of funds liquidated because they are not profitable for the fund promoter because of their low AUM. In this regard, it seems worthwhile to take a closer look at the AUM of a fund. AUM can impact the fund’s