Competition in the Swedish mutual fund industry

Abstract

The mutual fund industry plays an important role in the Swedish society where a part of the future income for all people is linked to the return of Swedish mutual fund industry and its assets. The purpose of this thesis is to investigate the competitiveness in the Swedish premium pension system. We use publicly available data on market values, entry and exit to estimate the degree of competition in the premium pension system. By constructing a structural competition model we find that market value of mutual funds is negatively correlated by the concentration of the market. The premium pension system is characterized by a high degree of entry over the study period, 2001-2013. Mutual funds with lower market value are more likely to both enter and exit. Our findings suggest that the probability of exit does not increase when more mutual funds are added into the premium pension system.