The number of households and individuals owning mutual funds has remained steady over the past three years, a survey by the national association of US investment companies reports. The number held firm against the onslaught of mutual fund scandals, but still falls behind the industry peak in 2001.
The Investment Company Institute survey found that an estimated 53.7 million US households, or 47.5 percent of all households, and 91.3 million individual investors owned mutual funds in 2005 – down from the peak of 56.3 million households and 95.8 million individuals in 2001.
“Mutual funds play a prominent role in helping Americans achieve their long-term financial goals, and many invest in funds through employer-sponsored retirement plans,” said Sandy West, director of market policy research at ICI. “The number of households owning funds inside retirement plans increased 87 percent between 1997 and 2005, largely due to the widespread use of mutual funds as investment options in defined contribution plans.”
Ownership of mutual funds outside employer-sponsored retirement plans exceeds ownership inside these plans, but the gap has narrowed in recent years. The survey found that an estimated 35.6 million US households own funds inside employer plans in 2005, compared with 38.9 million US households owning funds outside these plans.
The survey also found that most mutual fund shareholders are in their prime earning years, two-thirds of the 53.7 million households owning mutual funds in 2005 headed by individuals age 35 to 64. And that half of all US households owning funds in 2005 have incomes between $25,000 and $74,999.
The Investment Company Institute’s report on household ownership of mutual funds is based on a survey of 3,000 randomly selected US households conducted in June 2005.