Competition and incentives in the mutual fund industry: Evidence from product development strategies

Andreas Ørpetveit ()
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Andreas Ørpetveit: Dept. of Business and Management Science, Norwegian School of Economics, Postal: NHH , Department of Business and Management Science, Helleveien 30, N-5045 Bergen, Norway, https://www.nhh.no/en/employees/faculty/andreas-orpetveit/

No 2025/13, Discussion Papers from Norwegian School of Economics, Department of Business and Management Science

Abstract: Despite extensive evidence of how competition in the mutual fund industry affects fees and performance outcomes, less is known about its effect on the incentives of market participants. This paper examines how competition drives product development in mutual fund families. The results show that greater industry competition encourages fund families to focus more on enhancing product quality than altering the fund base. Quality development increases performance across family-affiliated funds, ultimately benefiting investors. Based on these results, I argue that competition helps mitigate conflicts of interest associated with the family-based structure of the industry.

Keywords: Mutual funds; mutual fund families; competition; product development (search for similar items in EconPapers)
JEL-codes: G11 G20 L10 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2025-05-07
New Economics Papers: this item is included in nep-com, nep-fmk and nep-ind
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:nhhfms:2025_013

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