Households owning exchange-traded funds fall on the younger side than households holding mutual funds outside of retirement accounts — aka “retail mutual fund households.” They’re also more comfortable and confident online, and are fine with making their own investment decisions.
So says a report from the Investment Company Institute and Strategic Business Insights, which finds that while just 7% of U.S. households reported recent or ongoing ownership of ETFs in the 2016–17 MacroMonitor Survey, 21% of ETF-owning households were headed by a person younger than 40 years old, compared with 15% of retail mutual fund households.
In addition, just 36% of ETF households were headed by someone aged 60 or older, compared with 52% of retail mutual fund households.
ETF households also tend toward being more highly educated, the report finds, with 66% of ETF households reporting at least one college degree. That’s compared with 56% of retail mutual fund households and 34% of all U.S. households. ETF households also tended to have higher incomes, although households across all income groups report ETF ownership.