Mutual Funds

The mutual fund industry has enjoyed considerable growth in the past few decades. The number of mutual funds worldwide grew from 6,778 in 1997 to a peak of 9,616 funds in 2018. This strong growth was disrupted in 2020, however, by the coronavirus pandemic, which began in Wuhan, China, in late 2019. Business lockdowns and work and travel restrictions contributed to an economic slowdown. The open-end investment funds industry in the U.S. declined as “cash-strapped investors withdrew capital from investments amid high economic uncertainty,” according to the research group IBISWorld. The number of funds has declined from 9,616 in 2018 to 9,345 in 2022, but overall growth in revenue will continue to occur (albeit more slowly than in the past). The U.S. mutual fund industry is expected to expand at a compound annual growth rate of 4 percent from 2023 to 2028, according to Mordor Intelligence, a market research and advisory firm. Growth in this industry in the coming years will be due to projected increases in corporate profits and rising prices in financial markets.