There’s never been greater access and competition in the American investment universe, but one product continues to deliver results 100 years after its modern version was launched.
While investors have an array of investment options that may be bewildering – and perhaps because of that – mutual funds remain a popular choice and are a key driver of wealth for middle-class Americans, according to the Investment Company Institute.
In two reports, ICI reveals that almost 54% of US households own mutual funds in 2024, up almost two percentage points from 2023. In 1980, even before the advent of ETFs and many other investment products, less than 6% of households owned mutual funds.
Most of the 2024 owners of mutual funds are focused on long-term investing and have a median household income of $115,000. Owners also tend to be in peak working ages, with 53% of mutual fund–owning households headed by individuals aged 35-64, while 31% were 65 or older.
Retirement savings are a clear priority (80% of surveyed households said so) with almost three-quarters of mutual fund–owning households holding them through employer-sponsored retirement plans, including 401(k) plans, while more than half held mutual funds through traditional or Roth IRAs.
“With 2024 marking the 100th anniversary of the mutual fund, there is no better way to celebrate than to acknowledge the more than 120 million investors relying on mutual funds to secure their financial future,” said Sarah Holden, ICI Senior Director of Retirement and Investor Research. “The mutual fund paved the way for other financial products including exchange-traded funds and now millions of US households own ETFs. The expanding fund market and fund shareholder base highlight that the successful innovation of investment products continues today.”
The ICI data also shows that 74 million (56%) of US households own products from US-registered investment companies with almost one quarter of all US households’ financial assets held in these companies. It also reveals that 71 million US households (54%) own mutual funds, 16.9 million (13%) own ETFs, and 3.6 million (3%) own closed-end funds.
While mutual fund owners may tend to be middle class, they have seen increased diversity with 41% of mutual fund–owning households who purchased their first fund after 2019 identifying as Asian, Hispanic, or Black, which is more than triple the percentage that bought their first mutual fund before 1990.
The data is drawn from ICI’s reports “Ownership of Mutual Funds and Shareholder Sentiment, 2024” and “Characteristics of Mutual Fund Investors, 2024.
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