A New Framework for Analyzing Market Share Dynamics among Fund Families

摘要

A simple framework decomposes changes in a fund family's market share into four components. The components are highly relevant for understanding mutual fund market dynamics and evaluating the business performance of fund families. Two components are performance driven, and two are flow driven. Analysis of US market data shows that the "Excess Flows" component, which measures whether fund family flows exceed or lag those of competitors that operate in the same fund categories, has the biggest impact on fund-family market share changes. Major cross-sectional differences characterize how individual families score on each of the components. Fund families can use this framework to provide input for strategic decision making.Disclosure:The author reports no conflicts of interest. Editor's Note This article was externally reviewed using our double-blind peer-review process. When the article was accepted for publication, the author thanked the reviewers in the acknowledgments for their comments and suggestions. Jian ZHANG and one anonymous reviewer were the reviewers for this article. Submitted 31 January 2019 Accepted 9 March 2020 by Stephen J. Brown