MUTUAL FUNDS EFFICIENCY COMPARISON BETWEEN U.S. AND EUROPE

Jennifer Foo
Stetson University, U.S.A.
Dorota Witkowska
University of Lodz, Poland
ABSTRACT
Mutual funds provide small investors access to large investment opportunities and
choices through professional management. The U.S. and the European mutual fund industries
have similar characteristics operating in sophisticated and well-developed financial markets. The
U.S mutual funds market is one of the most diverse and largest in the world. However, is the U.S.
market the most efficient compared to the European market in its efficiency and performance?
This paper compares the U.S. and European mutual fund industries in terms of their efficiency and
performance. The methodology of Sharp, Treynor and Jensen efficiency measures are used to
carry out an empirical analysis. The results of this study show that U.S. mutual funds perform
better than the European funds analyzed in this study when compared to their respective
benchmark market returns.