Investment funds are gaining importance in recent times, since they allow small investors to reduce risk, use financial expertise, facilitate access to the international capital market and achieve a higher rate of return on investments compared to banks. The aim of this research is to show, in accordance with the available data and using comparative analysis, the similarities and differences in the operations of investment funds in Bosnia and Herzegovina, Serbia, Croatia and Montenegro, and to prove that these financial institutions, although they have potential, do not contribute to the economic development of these countries to the extent that they could. The object of the comparison is the nature of the origin, the number, the type, the net asset value and the percentage of the participation of investment funds in the GDP of the observed countries. The main hypothesis is that investment funds in analyzed countries do not represent a significant part of the financial system and, due to the nature of their creation, do not make a significant contribution to economic development. Two auxiliary hypotheses arise from the main hypothesis: investment funds, created in the process of privatization, due to the absence of essential market conditions for their establishment, are not able to achieve a significant impact on economic growth; the growth of the value of the investment funds assets does not affect the growth of the volume of investments in the country. In addition to the comparative analysis methods, the method of simple correlation analysis, as well as other scientific methods, will be used to prove these hypotheses. The results of the survey confirmed the hypothesis that investment funds do not represent an important part of the financial system in the analyzed countries today and, due to the nature of their creation, and do not make a significant contribution to the economic development