Where does the revenues in the mutual fund industry come from? A qualitative study exploring actively managed mutual funds where a distinction has been made between bank- and nonbank distributed fund

Abstract: This thesis investigates where the revenues in the mutual fund industry comes from and what determines the large amount of assets under management (AUM) within this industry. A qualitative study has been conducted where eight different interviews were held with interviewees within various seniorities at different institutions. The seniorities included professionals from both banks and nonbanks since these perspectives were considered to differ. The findings reveal that banks, with a large internal distribution channel, tend to recommend their own funds and hence generate higher revenues both from the additional AUM but also from the higher fees charged. We also find that banks use complementary services from its large distribution channel, such as offering lower interest rates to attract additional customers. Further, for funds that are nonbank distributed, third parties such as brokerage houses, are essential to attract capital by being included in the pre-set portfolios that brokers recommend to their customers. The findings also confirm previous research which states that determinants such as the fund manager's reputation, performance, the fee charged, and marketing are all of importance in order to increase the AUM of a fund and hence its revenues.