From the December 2009 issue of Boomer Market Advisor • Subscribe!

2010 Product & Trend Guide - Mutual Funds

Download the full 2010 Mutual Funds product list HERE

TRENDS:

Fools rush in?
All due respect to the King, are investors getting ahead of themselves? Or are they properly aligned to take advantage of a sustained rebound? Here are the facts. We'll leave it to you to decide.

The combined assets of the nation's mutual funds increased by $185.2 billion, or 1.8 percent, to $10.613 trillion in the latest Investment Company Institute compilation. In the survey, mutual fund companies report actual assets, sales, and redemptions to ICI.

Long-term funds -- stock, bond, and hybrid funds -- had a net inflow of $49.98 billion vs. an inflow of $45.71 billion in the previously reported period.

Stock funds posted an inflow of $3.86 billion, compared with an inflow of $9.22 billion in the previously reported period. Among stock funds, world equity funds (US funds that invest primarily overseas) posted an inflow of $5.88 billion in August vs. an inflow of $6.94 billion. Funds that invest primarily in the US had an outflow of $2.02 billion vs. an inflow of $2.27 billion in the previously reported period.

Hybrid funds posted an inflow of $3.21 billion, compared with an inflow of $1.79 billion. Bond funds had an inflow of $42.91 billion, compared with an inflow of $34.70 billion in the previously reported period. Taxable bond funds had an inflow of $33.84 billion in August vs. an inflow of $27.91 billion. Municipal bond funds had an inflow of $9.07 billion, compared with an inflow of $6.80 billion in the previously reported period.

Total Net Assets of Mutual Funds

Retirement saving - primary mutual fund investor goal
Mutual fund-owning households have a variety of financial goals for their mutual fund investments.

  • The vast majority, 95 percent, indicated they were using mutual funds to save for retirement;
  • 76 percent indicated that saving for retirement was their household's primary financial goal;
  • Many mutual fund-owning households (47.5 million) held funds in tax-deferred savings accounts;
  • Nevertheless, 16.7 million U.S. households held long-term mutual funds (stock, bond, and balanced/hybrid funds) in taxable accounts in '08.

Retirement is not the only financial goal for households' mutual fund investments.

  • Fifty-two percent of mutual fund-owning households reported that reducing their taxable income was one of their goals;
  • 45 percent listed saving for an emergency as a goal; and
  • 25 percent reported saving for education among their goals.
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