Analysis of Investor Experience Puts U.S. on Top

Morningstar evaluated markets worldwide and found the U.S. and Singapore as the best for investors.

The evaluation used criteria such as investor protection, transparency, fees, taxation, and investment distribution. The U.S. received an ‘A’ in the areas of disclosure, fees and expenses, and sales and marketing, but a ‘C+’ for regulation and taxation, Morningstar reported. The report cited how U.S. government bodies tasked with investor protection have struggled to identify violations in a timely manner, such as the Madoff ponzi scheme.   

Additionally, the U.S. is one of only five countries to tax fund investors on capital gains earned within fund shares, and its tax rates for short-term capital gains are among the highest in the study.   

Singapore received A’s for regulation and taxation as well as for sales and media. The country has a strong regulatory regime with an absence of most investment taxes, the press release said. Regulations ban sales practices that are most rife for abuse, and disclosure is good. However, Singaporean funds could carry lower costs.  

New Zealand scored the worst overall (D-), largely because of low grades in the areas of disclosure, as well as regulation and taxation.   

Of the new countries reviewed in this year’s study, Thailand had the highest overall score of A-. Strong disclosure and low fund fees boosted the country’s score. However, limited fund availability, sales contests, and poor media coverage tempered the rating. South Africa scored at the bottom of the new countries evaluated with a C-.  

The complete report, including the overall grades of the 22 countries evaluated, is here.