401(k)s boost mutual fund ownership

Nearly 51 million Americans currently households own mutual funds, representing 44% of all households and 88.2 million individual shareholders, reported the Investment Company Institute in findings released today. Mutual fund ownership remained essentially steady from 2006 which found 49.9 million households and 87.9 million individuals. For the first time, the study, conducted by the Washington-based industry advocacy group, included data on the ownership of all registered investment company products such as ETFs, closed-end funds and unit investment trusts. A full 51.4 million households own funds offered by investment companies. The households own about 84% or $10.3 trillion of the $12.2 trillion in assets in these funds by mid-2007. Those assets account for about 25% of household financial assets, they found. The researchers also identified several additional trends in mutual fund ownership. Shareholders have moderate incomes and are in the peak earning and saving years. About three in five households owning mutual funds have incomes ranging from $25,000 to $99,999, the study found. Two-thirds of the households are headed by individuals between the ages of 35 and 64. Twice as many own funds through tax-deferred accounts like employer-sponsored retirement plans, IRAs and variable annuities, as compared to other sources. Fund ownership has grown through workplace retirement plans, fueled by the growing popularity of defined contribution plans like 401(k)s, the researchers concluded. The findings were based on a random survey of nearly 4,000 households.