Our global survey ranks the United States as tied for the highest. But advisors and investors must continue to push for lower fees and better tax treatment.
This article first appeared in the April/May 2011 issue of Morningstar Advisor magazine. Get your free subscription here.
In 2009, Morningstar issued its first Global Fund Investor Experience Survey, which examined the investment environment for mutual fund investors in 16 countries. The survey's aim was to highlight best, average, and worst practices, with the hope of stimulating discussion and--where necessary--encouraging improvement.
In that goal, the survey was successful. It received extensive worldwide media coverage and generated responses from many fund- company trade organizations and regulatory bodies (including the Investment Company Institute and SEC in the United States). Most of the exchanges we had with these groups consisted of sharing thoughts as opposed to sparking immediate change, but in a few cases, the survey did prompt immediate improvement.
In March, Morningstar released a new, updated survey. In the two years since the first report, we added six countries: Belgium, India, Norway, South Africa, Sweden, and Thailand. In addition, we retooled the survey to place more emphasis on questions that can be answered quantitatively, rather than relying on the judgment of Morningstar's mutual fund analysts based in the countries. As before, the survey is not simply a measure of the various fund industries. It is a study of investor experiences and includes the effects of government bodies, the media, and advisors.
The top scoring countries in Survey 2.0 are Singapore and the United States, which each receive the highest overall grade of A. These are followed, very broadly speaking, by Asian countries along with the better European scorers, then by the weaker European marketplaces, and finished by the small and isolated markets of South Africa and New Zealand at the bottom.
The United States excels in three of the survey's four sections.
Without question, the United States is the global leader for its disclosure requirements. Portfolios are published quarterly; manager names and tenures are required items; the SEC maintains an Internet site whereby fund documents can be readily retrieved; and the