From the January 2008 issue of Research Magazine • Subscribe!

January 1, 2008

Fund Owndership Steady at 51 Million Homes

The number of American households owning mutual funds is about 51 million, the Investment Company Institute says, up slightly from 2006. That represents about 44 percent of all U.S. households and 89 million individual shareholders.

The latest ICI study, "Trends in Ownership of Mutual Funds in the United States, 2007," also finds that roughly three in five U.S. households owning mutual funds have incomes between $25,000 and $99,999. About twice as many U.S. households own mutual funds through tax-deferred accounts/employer-sponsored retirement plans, individual retirement accounts and variable annuities as own funds outside of such accounts.

"Mutual funds remain a key investment for middle-income families, particularly in their peak earning and saving years," explains Sarah A. Holden, senior director of retirement and investor research, ICI. "Funds are also crucial to families' retirement plans: Almost nine out of 10 fund-owning households own them through tax-deferred accounts earmarked for retirement, including IRAs and 401(k) plans."

ICI's latest mutual fund ownership data are based on a random survey of close to 4,000 U.S. households and reflect a recent change in the factors used to weight survey responses so that the sample more accurately reflects the full U.S. population. "ICI constantly strives to refine its research methodology," Holden says.

Households own about 84 percent, or $10.3 trillion, of the $12.2 trillion in mutual fund assets, including exchange-traded funds, closed-end funds, and unit investment trusts, ICI reports. These assets account for about one-quarter of household financial assets.

Roughly 45.4 million households own funds through tax-deferred accounts, up from 35.7 million in 1998; 33 million households hold mutual funds through employer-sponsored retirement accounts, up from 27 million in 1998. The number of households owning funds outside of tax-deferred accounts is nearly unchanged at 22 million households today vs. 21.1 million in 1998.

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Janet Levaux is the managing editor of Research; reach her at jlevaux@researchmag.com.

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