Introduction

The last decade has seen an unprecedented development of the investment funds industry. The number of funds available to investors has increased steadily. According to data from European Fund and Asset Management Association (EFAMA), 72,657 investment funds – including funds of funds – are distributed throughout the world at the end of 2011. Despite the increase in net outflows due to recent financial shocks, the total outstanding investment funds have increased about 20 percent between 2005 and 2011. Investment fund assets worldwide stand at $25.84 trillion – including funds of funds – at the end of 2011. The market share is dominated by the United States (49%), Europe (28.2%), and four major countries (Brazil, Australia, Japan, and Canada). Several factors may explain this development. These include the large volume of savings worldwide, a regulatory framework for the gradual opening of financial markets, growth in emerging markets, especially for the Brazil, Russia, India, China and South Africa countries, and low interest rates for developed countries. Another explanation, with reference to the foundations of, financial theory attributes this situation to the logic of portfolio diversification. The ongoing search from investors for both performance and global investments has prompted managers to offer new products that are more sophisticated and more or less attractive. Recently, in light of financial crises, the role of investment funds became a recurring subject for discussion among practitioners, academics, and regulators. In the past, crises used to be limited to singular markets or specific asset classes. In today’s crises, many different asset classes are affected simultaneously and globally. Given this new context, our traditional methods must be adapted with the overall objective to strengthen the scientific knowledge of investment funds.