NUMBER OF US REGISTERED FUNDS AND US-LISTED COMPANIES
Source: The World Bank, ICI 2021 Investment Company Factbook. Number of Registered Investment Companies exclude funds that invest primarily in other funds.
From 2000 to 2020, the number of funds increased from 17,249 to a whooping 26,592, while the number of companies decreased from 6,236 to 4,226. We now have more than six funds for every company! With more funds chasing fewer investments, the asset management industry has become bloated and a drag on investor value creation.
With the enormous number of choices, massive marketing efforts and constant media chatter, it is easy to see how we might be convinced that we need some of everything to be a successful investor. Fear of missing out can be a powerful emotional driver.
At this point, it can be helpful to get back to basics. The primary source of value creation and performance for building long-term wealth comes from the underlying companies and their earnings compounded over time. As long-term investors, we can do quite well with a straightforward portfolio consisting of a handful of thoughtfully selected funds that pursue different strategies, resulting in a well-managed equity portfolio. Simple but not easy.
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The information provided here is for general informational purposes only and should not be considered an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. It should not be assumed that recommendations of AthenaInvest made herein or in the future will be profitable or will equal the past performance records of any AthenaInvest investment strategy or product. There can be no assurance that future recommendations will achieve comparable results. The author’s opinions may change, without notice, in reaction to shifting economic, market, business, and other conditions. AthenaInvest disclaims any responsibility to update such views. These views may not be relied upon as investment advice or as an indication of trading intent on behalf of any AthenaInvest representative.
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