Global Mutual Fund Industry Comparisons: Canada, The United Kingdom And The United States

Abstract

The concept of mutual funds is older than many believe, originating in Holland over 230 years ago.  Through the years, mutual funds have evolved by allowing investors to invest their capital in various venues.  The structure of mutual funds in Canada, the United Kingdom, and the United States possess similar configurations.  The majority of funds in all three nations are invested in the equity market.  Although the structure may be the same, the size in terms of assets varies by these three countries.  This is not the only difference though; the expense ratio is greatly differentiated, dramatically affecting the amount of return that the investor will anticipate over time.  Assuming identical returns, the authors illustrate that over a hypothetical ten-year time period, your funds would grow the most in the United States, followed by the United Kingdom and finally Canada.  This analysis assumes comparable contemporary expense ratios of 1.4% for the United States, 1.63% for the United Kingdom, and 2.1% for Canada.  In addition, we make the assumption that these comparison countries are having investors procure funds in no-load mutual funds.