12.3.2009 According to a newly updated annual survey published by the Investment Company Institute (ICI), more than 50 million U.S. households owned mutual funds in 2009, 3.0 million households reported owning exchange-traded funds (ETFs), and 1.8 million households reported owning closed-end funds. ICI’s annual survey, released in two studies, Ownership of Mutual Funds, Shareholder Sentiment, and Use of the Internet, 2009 and Characteristics of Mutual Fund Investors, 2009, also reported that shareholders’ views of mutual funds continued to track stock market performance. Shareholders’ sentiment toward mutual funds declined in 2009, following the sharp drop in stock prices, with favorability falling to 64%, down from 73% in 2008. The ICI survey was conducted in May 2009, when the S&P 500 index averaged 900, below its average of 1,400 in May 2008. Other survey findings include:

  • Most U.S. mutual fund shareholders had moderate incomes and were in their peak earning and saving years. About three in five households owning mutual funds had incomes between $25,000 and $99,999, and about two-thirds were headed by individuals between the ages of 35 and 64.
  • Baby Boomers are the largest mutual fund-owning generation. In 2009, 46% of mutual fund-owning households were headed by Baby Boomers, and they held 59% of households’ mutual fund assets.
  • Fund performance continues to have the most influence over investors’ opinions of the fund industry overall—with two-thirds of owners familiar with mutual fund companies indicating that fund performance was a “very” important factor. Other important factors that influenced shareholder views included the opinion of professional financial advisers, personal experience with a mutual fund company, and current financial events.
  • Younger mutual fund investors had a more favorable view of mutual funds than did older investors. For example, in 2009, 72% of fund owners younger than 35 who were familiar with mutual fund companies had “very” or “somewhat” favorable impressions of mutual fund companies, compared with 61% of fund owners age 65 or older.
  • Although shareholder confidence was shaken somewhat in 2009, the majority of mutual fund investors were still confident in mutual funds’ ability to help them achieve their financial goals. In 2009, 73% of fund shareholders said they were “very” or “somewhat” confident, compared with 85% of fund shareholders in 2008.
  • Employer-sponsored retirement plans and financial advisers are the main avenues for fund investments. Specifically, 68% of mutual fund-owning households owned funds through employer-sponsored retirement plans, and 69% owned funds outside of these plans. Among households owning mutual funds outside of employer-sponsored retirement plans, 80% owned funds purchased from professional financial advisers.
  • Nine in 10 mutual fund owners reported having Internet access. Among that group, eight in 10 used the Internet for financial purposes.  

Click http://www.ici.org/pressroom/news/09_news_own_char to access the release. Click http://www.ici.org/pdf/fm-v18n7.pdf to access the study titled Ownership of Mutual Funds, Shareholder Sentiment, and Use of the Internet, 2009. Click http://www.ici.org/pdf/fm-v18n8.pdf to access the study titled Characteristics of Mutual Fund Investors, 2009.