The growth and size of the Brazilian mutual fund industry

Varga, Gyorgy and Wengert, Maxim (2010): The growth and size of the Brazilian mutual fund industry.

Abstract

This article describes the evolution of the Brazilian mutual fund industry, its regulatory framework, organization, types of investors and managers, economic environment and its relative growth. It shows the evolution of this industry in Brazil and its idiosyncrasies providing a deeper look into one of the largest emerging market mutual fund industries. It emphasizes the growth of independent managers with more complex assets and sophisticated strategies that resemble international hedge funds. There are many popular and academic explanations for the mutual funds growth, some of which were tested in this article using a time series framework. The results suggest that financial market innovation and market risk are significant variables in explaining growth. Common variables like economic growth, regulation and taxes were not found to be statistically significant. We conclude with a comparison between the evolution of the Brazilian and US mutual fund industries.

• Item Type: MPRA Paper
• Language: English
• Keywords: emerging markets, Brazilian financial market, hedge funds, mutual funds, international asset allocation.
• Subjects: G - Financial Economics > G1 - General Financial Markets > G11 - Portfolio Choice ; Investment Decisions; G - Financial Economics > G2 - Financial Institutions and Services > G23 - Non-bank Financial Institutions ; Financial Instruments ; Institutional Investors; G - Financial Economics > G1 - General Financial Markets > G15 - International Financial Markets; N - Economic History > N2 - Financial Markets and Institutions > N26 - Latin America ; Caribbean

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