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Portfolio > Mutual Funds

Household Fund Ownership Rises

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Oct. 21, 2004 — The number of U.S. households owning mutual funds increased this year after declining the previous two years, although it was down from the peak level of 2001, a trade group reported on Thursday.

A total of 48.1% of all domestic households owned funds as of June 2004, compared to 47.9% in July 2003, and 52% in 2001, according to the Investment Company Institute. Fund ownership by individuals rose to 92.3 million from 91.2 million during the 11-month span, the ICI said.

An estimated 53.9 million U.S. households owned funds in June, versus 53.3 million the previous July. The ICI also estimated that 32.5% of all domestic households held funds in employer-sponsored retirement plans in June, and 35.1% owned funds outside of these plans.

A separate ICI report showed that the average American fund shareholder is a middle-income and middle-aged investor who buys and holds funds to save for retirement.

Despite the recent bear market for stocks and the recession, fund shareholders continued to exhibit a “buy and hold” investment strategy, the ICI said.

The study found that 60% of investors neither bought or sold shares last year, except for “automatic contributions,” the ICI said. Of those who did make transactions, share purchases outnumbered redemptions by a margin of more than 2-1.

Contact Bob Keane with questions or comments at: [email protected].


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