The United States offers the best environment for fund investors, according to a measurement that takes in investor protection, transparency, fees, taxation and investment distribution.
South Africa had the lowest score out of the 24 countries measured by data provider Morningstar, while the European countries in the survey ranked in the middle.
The highest scoring European country was the Netherlands, which got the same score as Singapore, Thailand and Taiwan. France, Belgium and Italy were tied as the lowest-scoring European nations.
One reason Morningstar favours the US market is that costs for investors are low, unlike elsewhere.
“While the US and European fund markets are roughly similar in size, US investors pay significantly lower fees than European investors,” says Morningstar.
Countries can move improve their position in the rankings. New Zealand moved up three notches since Morningstar's 2011 study because of “positive regulatory changes and an encouraging expansion of disclosure requirements”.
Transparency is an important theme of the report, and Morningstar's research indicates there is still much room for improvement.
“Fund companies in most countries continue to treat the names of portfolio managers as trade secrets, leaving investors no way to determine who is responsible for a fund’s success or failure,” says the firm.
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