Foreign-promoted mutual funds in the continental European market

Abstract

Although European market regulators have implemented many measures in order to
make the market more integrated, a recent report by the European Fund and Asset
Management Association (EFAMA) in 2015 underlines that domestic actors remain
principal participants in member countries. My research questions the integration of
the European market by investigating the place of foreign promoters in continental
European markets. Using 12315 equity funds from 14 continental European countries
for the period from 2002 to 2014, I analyze the competitiveness and the market shares
of foreign-promoted funds. The results show that foreign-promoted funds seem to
be better performing than domestic-promoted funds. However, they do not attract
more investors. Foreign promoters appear to have significantly smaller market shares.
These results highlight the existence of barriers to foreign promoters in the European
mutual fund market.