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ICI Study Finds Improving Opinion

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Shareholders view mutual fund companies more favorably today than they did in 2003, when the industry hit a low point, according to the Investment Company Institute Annual Tracking Survey. In 2006, 77 percent of shareholders have a “very favorable” or “somewhat favorable” view of fund companies vs. 71 percent in 2003. Fifty-six percent of those surveyed who had previously owned funds have a very or somewhat favorable opinion of the industry, while 21 percent had a somewhat or very unfavorable view.

The influence professional financial advisors have on these opinions appears to move in the opposite direction of the markets’ and funds’ performance. In 2006, 74 percent of shareholders believe the performance of fund investments is “very important,” and 40 percent see the opinions of FAs as very important. In 2003, when the U.S. stock markets and many funds were weak, performance was seen as very important by 68 percent of consumers, and advisors’ opinions were very important to 46 percent of consumers.

The “most important” opinion-making factor, overall, is fund performance, say 44 percent of shareholders (see chart). Advisors’ opinions are seen as most important to 14 percent, and media influence is most significant to 2 percent of shareholders.