A comparison of international mutual funds efficiency

Abstract

In recent years, the investment fund industry has had a strong boost around the world, both in assets under management and in the number of funds and participants. This growth in supply and demand could be described as spectacular despite several crises in the financial markets during the last two decades. In this study, we examine and compare a sample of mutual funds across 35 countries for the 1990–2023 time period. The application of the efficiency ratios shows significant differences in efficiency among the evidence offered by the best-performing countries compared to those countries with the worst results. The fact that mutual funds obtain lower yield premiums compared to free-risk assets has originated a common situation of loss of performance efficiency at a global level. This phenomenon is shown by the three proposed indicators.