Number of Investment Companies and Sponsors USA 2007

There were approximately 500 financial firms from around the world that competed in the U.S. market to provide investment management services to fund investors at the end of 2006. Nearly 60 percent of U.S. fund and trust sponsors are independent investment advisers, and these sponsors manage more than half of investment company assets. Banks, insurance companies, securities broker-dealers, and non-U.S. sponsors are other major fund and trust sponsors in the U.S. marketplace.

About 280 fund advisers left the fund business from 2000 through 2006 while, at the same time, about 140 new firms entered. The overall effect has been a net reduction of approximately 20 percent in the number of industry firms serving investors. The reduction in the number of advisers has occurred with larger fund sponsors acquiring some smaller fund families and with some fund advisers liquidating funds.

Competitive dynamics also affect the number of funds offered in any given year by fund advisers that remain. In particular, fund sponsors create new funds to meet investor demand, and merge or liquidate funds that do not attract sufficient investor interest. Mutual fund sponsors opened about 270 more funds than they closed.

sponsors of ETFs and closed-end funds, on net, created 168 new funds in 2006.

As of year-end 2006, there were 15,638 investment companies (Figure 1.3): 8,726 mutual funds (including funds that invest in other funds), 5,907 unit investment trusts, 646 closed-end funds, and 359 exchange-traded funds. At the end of 2005 15,310 companies were there.

at