At the end of 2004, nearly half of all U.S. households-92 million Americans-own mutual funds, across a broad range of funds.
Overall, total industry assets were a record-high $8.1 trillion, invested in more than 8,000 mutual funds. More than half of these assets were invested in stock funds. Bond and hybrid funds accounted for roughly one-quarter of total assets; money market funds about one-quarter, according to tabulations released by ICI.
Stock funds are the most common type of mutual fund, representing more than half (57 percent) of the total number of mutual funds. Approximately 54 percent-$4.38 trillion-of total fund assets are invested in stock funds. November represented the fist time stock fund assets have topped $4 trillion since January 2001. The record peak was in August 2000 when stock fund assets were $4.57 trillion.
In 2004, stock funds experienced a net flow of $177.5 billion-the largest annual inflow since 2000 when stock funds had an inflow of $309 billion. January 2004 witnessed the third largest monthly inflow on record-$43 billion.
World equity funds (those that invest primarily overseas) posted an inflow of $67 billion. This represents the largest annual inflow to world equity funds and second largest inflow as a percentage of overall stock fund flow ($67 billion is 38 percent of $177 billion). The largest percentage was in 1994, when world equity fund flow represented 39 percent of overall stock fund flow. The previous largest dollar inflow was $50 billion in 2000.
Bond funds are the second most common type of mutual fund, accounting for a quarter of all funds available. At year-end, assets held in bond funds were $1.289 trillion, which is a record-high.
For the year, bond funds experienced a net outflow of $10.3 billion, compared with an inflow of $31 billion in 2003. In 2004, bond funds experienced an annual outflow for the first time since 2000, when bond funds had an outflow of $50 billion.
In December, hybrid fund assets reached a record-high level of $518.7 billion. For the year, hybrid funds had a positive flow of $42.6 billion, compared with $33 billion in 2003. This year’s inflow represents the second largest annual inflow. The largest was $44 billion in 1993.