Mutual fund and ETF providers in the U.S. - statistics & facts
In the timeframe between 2000 and 2023, mutual funds have continuously made up around half of all investment funds in the United States. Due to a surge in the influx of investments into mutual funds, net assets have expanded dramatically, rising by 20 trillion dollars between 1998 and 2023.
Mutual funds and exchange-traded funds (ETFs) are types of open-end, professionally managed funds where investors’ money is pooled together for the purpose of a common financial investment. "Open-end” allows investors to purchase or redeem a “share” of the fund at any time. As of 2022, there were over 137,000 regulated open-end funds worldwide, managing total financial assets amounting to a staggering 69 trillion U.S. dollars in 2023. While Europe is home to the highest number of regulated open-end funds, the United States houses the largest share of investment funds’ net assets.
While the nature of both mutual funds and ETFs can vary greatly, having many potential investment offerings, management styles, and market performance, the basic concept of using pooled investors' capital to invest collectively through portfolios remains the same.
What is the difference between mutual funds and ETFs?
The core difference between mutual funds and ETFs is that shares in an ETF are traded open on stock markets (like shares in a company), while mutual funds only process transactions at the close of business each day. This makes ETFs typically cheaper, as buying and selling is handled by the exchange, not the investment company. Despite this, the number of mutual funds in the U.S. is over two times greater than the number of ETFs.Active vs. passive funds
Further distinctions arise in the difference between passively and actively managed funds. Passively managed funds generally replicate the assets contained within a stock market index (for example, companies on the S&P 500 index), with the goal of tracking the performance of that index. Conversely, actively managed funds have a dedicated human manager tasked with generating the best possible return. This makes actively managed funds more expensive; consequentially, passive management is well-suited to ETFs. However, both mutual funds and ETFs can be actively or passively managed, with the share of passively managed funds doubling over the last decade.Who are the largest U.S. providers of investment funds?
Of the numerous investment managers in the U.S., five are generally considered the most important: BlackRock, Vanguard, Fidelity, State Street, and Charles Schwab. BlackRock is the largest asset manager in the world, and through its iShares brand, it is the leading provider of ETFs in the U.S. , followed by Vanguard and State Street. By contrast, Fidelity and Charles Schwab place more emphasis on their actively managed mutual funds. The largest investment fund in the United States – and the world - is the Vanguard Total Stock Market Index Fund, with over 1.5 trillion U.S. dollars of assets under management. This fund is a passive fund divided into multiple products, meaning shares in the fund are available as both an ETF and a mutual fund.While the nature of both mutual funds and ETFs can vary greatly, having many potential investment offerings, management styles, and market performance, the basic concept of using pooled investors' capital to invest collectively through portfolios remains the same.
