Profile Of Mutual Fund Shareholders,
ICI RESE ARCH REPORTJ A N UA R Y 2021Profile of Mutual FundShareholders, 2020W A S H I N G T O N , D C // L O N D O N // B R U S S E L S // H O N G K O N G // W W W . I C I . O R G
Copyright 2021 by the Investment Company Institute. All rights reserved.The Investment Company Institute (ICI) is the leading association representing regulated funds globally, including mutual funds,exchange-traded funds (ETFs), closed-end funds, and unit investment trusts (UITs) in the United States, and similar funds offered toinvestors in jurisdictions worldwide. ICI seeks to encourage adherence to high ethical standards, promote public understanding, andotherwise advance the interests of funds, their shareholders, directors, and advisers.Suggested citation: Schrass, Daniel, and Michael Bogdan. 2021. “Profile of Mutual Fund Shareholders, 2020.” ICI Research Report (January).Washington, DC: Investment Company Institute. Available at www.ici.org/pdf/20 rpt profiles.pdf.
Contents1Introduction1 Annual Survey2 The “Typical” Mutual Fund–Owning Household2 Variations in Characteristics of Households That Own Mutual Funds5Chapter 1: Mutual Fund–Owning Households5 Demographic Characteristics6 Employment Status and Household Income6 Financial Characteristics7 Mutual Fund Ownership8 Goals and Mutual Fund Investing8 Views on Investment Risk17Chapter 2: Mutual Fund–Owning Households by Fund Ownership Inside and OutsideEmployer-Sponsored Retirement Plans19Chapter 3: Mutual Fund–Owning Households by Channels Used to Purchase MutualFunds Outside Employer-Sponsored Retirement Plans21Chapter 4: Mutual Fund–Owning Households by Primary Source for Purchasing Funds23Chapter 5: Mutual Fund–Owning Households by Generation25Chapter 6: Mutual Fund–Owning Households by Age27Chapter 7: Mutual Fund–Owning Households by Household Income29Chapter 8: Mutual Fund–Owning Households by Household Financial Assets31Chapter 9: Mutual Fund–Owning Households by Investment Risk Tolerance33Chapter 10: Mutual Fund–Owning Households by Year of Initial Mutual FundPurchase35Appendix: Research Methodology35 Research Design35 Interviewing35 Revisions to ICI’s Annual Mutual Fund Shareholder Tracking Survey36 Survey Weights36 Sampling Error37Notes38References
FiguresAll figures are available in a Microsoft Excel file located at www.ici.org/info/20 rpt profiles data20.xls. Thosewith page numbers indicated are available in this report.Chapter 1: Mutual Fund–Owning Households5 Figure 1.158.7 Million US Households Owned Mutual Funds9 Figure 1.2Mutual Fund Shareholder Head of Household Characteristics10 Figure 1.3Employment Status and Income of Households Owning Mutual Funds11 Figure 1.4Mutual Fund–Owning Households’ Financial Assets12 Figure 1.5Mutual Fund Investing Among Households Owning Mutual Funds13 Figure 1.6Households Own Many Funds Through Multiple Purchase Sources14 Figure 1.7Sources Used to Purchase Mutual Funds15 Figure 1.8Financial Goals of Households Owning Mutual Funds16 Figure 1.9Views on Investment RiskChapter 2: Mutual Fund–Owning Households by Fund Ownership Inside and OutsideEmployer-Sponsored Retirement Plans17 Figure 2.1Mutual Fund Owning–Households by Fund Ownership Inside and Outside Employer‑SponsoredRetirement PlansFigure 2.2Head of Household Characteristics by Fund Ownership Inside and Outside Employer-SponsoredRetirement PlansFigure 2.3Employment Status and Income by Fund Ownership Inside and Outside Employer-SponsoredRetirement PlansFigure 2.4Mutual Fund–Owning Households’ Financial Assets by Fund Ownership Inside and OutsideEmployer‑Sponsored Retirement PlansFigure 2.5Mutual Fund Investing by Fund Ownership Inside and Outside Employer-Sponsored Retirement Plans
Figure 2.6Number of Funds Owned and Purchase Sources Used by Fund Ownership Inside and Outside Employer-SponsoredRetirement PlansFigure 2.7Sources Used to Purchase Mutual Funds by Fund Ownership Inside and Outside Employer-SponsoredRetirement PlansFigure 2.8Financial Goals by Fund Ownership Inside and Outside Employer-Sponsored Retirement PlansFigure 2.9Views on Investment Risk by Fund Ownership Inside and Outside Employer-Sponsored Retirement PlansChapter 3: Mutual Fund–Owning Households by Channels Used to Purchase Mutual Funds OutsideEmployer-Sponsored Retirement Plans19 Figure 3.1Sources Used by Mutual Fund–Owning Households to Purchase Mutual FundsFigure 3.2Head of Household Characteristics by Fund Ownership Outside Employer-Sponsored Retirement PlansFigure 3.3Employment Status and Income by Fund Ownership Outside Employer-Sponsored Retirement PlansFigure 3.4Mutual Fund–Owning Households’ Financial Assets by Fund Ownership Outside Employer-SponsoredRetirement PlansFigure 3.5Mutual Fund Investing by Fund Ownership Outside Employer-Sponsored Retirement PlansFigure 3.6Number of Funds Owned and Purchase Sources Used by Fund Ownership Outside Employer-SponsoredRetirement PlansFigure 3.7Sources Used to Purchase Mutual Funds by Fund Ownership Outside Employer-Sponsored Retirement PlansFigure 3.8Financial Goals by Fund Ownership Outside Employer-Sponsored Retirement PlansFigure 3.9Views on Investment Risk by Fund Ownership Outside Employer-Sponsored Retirement PlansChapter 4: Mutual Fund–Owning Households by Primary Source for Purchasing Funds21 Figure 4.1Mutual Fund–Owning Households by Primary Source for Purchasing FundsFigure 4.2Head of Household Characteristics by Primary Purchase SourceFigure 4.3Employment Status and Income by Primary Purchase SourceFigure 4.4Mutual Fund–Owning Households’ Financial Assets by Primary Purchase SourceFigure 4.5Mutual Fund Investing by Primary Purchase Source
Figure 4.6Number of Funds Owned and Purchase Sources Used by Primary Purchase SourceFigure 4.7Sources Used to Purchase Mutual Funds by Primary Purchase SourceFigure 4.8Financial Goals by Primary Purchase SourceFigure 4.9Views on Investment Risk by Primary Purchase SourceChapter 5: Mutual Fund–Owning Households by Generation23 Figure 5.1Mutual Fund–Owning Households and Assets by GenerationFigure 5.2Head of Household Characteristics by GenerationFigure 5.3Employment Status and Income by GenerationFigure 5.4Mutual Fund–Owning Households’ Financial Assets by GenerationFigure 5.5Mutual Fund Investing by GenerationFigure 5.6Number of Funds Owned and Purchase Sources Used by GenerationFigure 5.7Sources Used to Purchase Mutual Funds by GenerationFigure 5.8Financial Goals by GenerationFigure 5.9Views on Investment Risk by GenerationChapter 6: Mutual Fund–Owning Households by Age25 Figure 6.1Mutual Fund–Owning Households and Assets by AgeFigure 6.2Head of Household Characteristics by AgeFigure 6.3Employment Status and Income by AgeFigure 6.4Mutual Fund–Owning Households’ Financial Assets by AgeFigure 6.5Mutual Fund Investing by AgeFigure 6.6Number of Funds Owned and Purchase Sources Used by AgeFigure 6.7Sources Used to Purchase Mutual Funds by Age
Figure 6.8Financial Goals by AgeFigure 6.9Views on Investment Risk by AgeChapter 7: Mutual Fund–Owning Households by Household Income27 Figure 7.1Mutual Fund–Owning Households by Household IncomeFigure 7.2Head of Household Characteristics by Household IncomeFigure 7.3Employment Status and Income by Household IncomeFigure 7.4Mutual Fund–Owning Households’ Financial Assets by Household IncomeFigure 7.5Mutual Fund Investing by Household IncomeFigure 7.6Number of Funds Owned and Purchase Sources Used by Household IncomeFigure 7.7Sources Used to Purchase Mutual Funds by Household IncomeFigure 7.8Financial Goals by Household IncomeFigure 7.9Views on Investment Risk by Household IncomeChapter 8: Mutual Fund–Owning Households by Household Financial Assets29 Figure 8.1Mutual Fund–Owning Households by Household Financial AssetsFigure 8.2Head of Household Characteristics by Household Financial AssetsFigure 8.3Employment Status and Income by Household Financial AssetsFigure 8.4Mutual Fund–Owning Households’ Financial Assets by Household Financial AssetsFigure 8.5Mutual Fund Investing by Household Financial AssetsFigure 8.6Number of Funds Owned and Purchase Sources Used by Household Financial AssetsFigure 8.7Sources Used to Purchase Mutual Funds by Household Financial AssetsFigure 8.8Financial Goals by Household Financial AssetsFigure 8.9Views on Investment Risk by Household Financial Assets
Chapter 9: Mutual Fund–Owning Households by Investment Risk Tolerance31 Figure 9.1Mutual Fund–Owning Households by Investment Risk ToleranceFigure 9.2Head of Household Characteristics by Investment Risk ToleranceFigure 9.3Employment Status and Income by Investment Risk ToleranceFigure 9.4Mutual Fund–Owning Households’ Financial Assets by Investment Risk ToleranceFigure 9.5Mutual Fund Investing by Investment Risk ToleranceFigure 9.6Number of Funds Owned and Purchase Sources Used by Investment Risk ToleranceFigure 9.7Sources Used to Purchase Mutual Funds by Investment Risk ToleranceFigure 9.8Financial Goals by Investment Risk ToleranceFigure 9.9Views on Investment Risk by Investment Risk ToleranceChapter 10: Mutual Fund–Owning Households by Year of Initial Mutual Fund Purchase33 Figure 10.1Mutual Fund–Owning Households by Year of Initial Mutual Fund PurchaseFigure 10.2Head of Household Characteristics by Year of Initial Mutual Fund PurchaseFigure 10.3Employment Status and Income by Year of Initial Mutual Fund PurchaseFigure 10.4Mutual Fund–Owning Households’ Financial Assets by Year of Initial Mutual Fund PurchaseFigure 10.5Mutual Fund Investing by Year of Initial Mutual Fund PurchaseFigure 10.6Number of Funds Owned and Purchase Sources Used by Year of Initial Mutual Fund PurchaseFigure 10.7Sources Used to Purchase Mutual Funds by Year of Initial Mutual Fund PurchaseFigure 10.8Financial Goals by Year of Initial Mutual Fund PurchaseFigure 10.9Views on Investment Risk by Year of Initial Mutual Fund Purchase
Profile of Mutual Fund Shareholders, 2020Daniel Schrass, economist, and Michael Bogdan, associate economist, prepared this report.IntroductionOwnership of mutual funds by US households grew significantly in the 1980s and 1990s and hasremained steady over the past two decades. On average since 1999, household ownership of mutualfunds has been about 45 percent each year; this is down a bit from 49 percent in 2001 but higherthan the 41 percent rate in 1998. Between mid-2000 and mid-2020, assets held in mutual fundsincreased from 7.1 trillion to 21.4 trillion.1 In 2020, 45.7 percent of US households owned mutualfunds, representing 102.5 million individual mutual fund shareholders. 2 Mutual fund holdingsrepresent a significant component of the savings and investments of many US households, withmutual fund assets now accounting for about one-fifth of households’ financial assets. 3Annual SurveyThe Investment Company Institute (ICI) conducts an annual survey to track US households’ownership of mutual funds and to gather information on their demographic and financialcharacteristics. The most recent survey was conducted from May to June 2020 and was based on adual-frame telephone sample of 3,001 randomly selected US households. Of these, 1,350 householdswere from a landline random digit dial (RDD) frame, and 1,651 households were from a cell phoneRDD frame. Of the households contacted, 1,372 (45.7 percent) owned mutual funds. Eligiblehouseholds were those owning mutual funds inside or outside employer-sponsored retirementplans, including funds purchased through investment professionals or directly from mutual fundcompanies or discount brokers. All interviews were conducted with the investment decisionmaker,the person most knowledgeable about the household’s savings and investments.4ICI RESEARCH REPORT: PROFILE OF MUTUAL FUND SHAREHOLDERS, 2020 // 1
The “Typical” Mutual Fund–Owning HouseholdThis report summarizes the findings of the 2020 survey. 5 As described in the first chapter, in 2020the “typical” mutual fund–owning head of household» was middle-aged, employed, educated, married or living with a partner;» shared investment decisionmaking with his or her spouse or partner;» had 105,000 in household income and 300,000 in household financial assets;» owned investments other than mutual funds, including individual stocks, and had morethan half of the household’s financial assets (excluding the primary residence) invested inmutual funds;» had 126,700 invested in four mutual funds, including at least one equity fund;» owned mutual funds inside an employer-sponsored retirement plan, such as a 401(k) plan,403(b) plan, 457 plan, SEP IRA, SAR-SEP IRA, or SIMPLE IRA;» owned mutual funds outside employer-sponsored retirement plans, primarily purchasedthrough investment professionals (e.g., registered investment advisers, full-service brokers,independent financial planners, bank or savings institution representatives, insurance agents,or accountants);» owned a traditional or Roth IRA; and» was confident that mutual funds could help him or her reach financial goals.Chapter 1 discusses a full set of figures highlighting demographic and financial characteristics ofmutual fund–owning households, the variety of mutual funds they own, and the different ways theypurchase mutual funds, as well as their financial assets, financial goals, and willingness to takeinvestment risk. The remaining chapters present similar information for subgroups of mutual fund–owning households. Figures for all of the chapters are available in a Microsoft Excel file located atwww.ici.org/info/20 rpt profiles data20.xls.Variations in Characteristics of Households That Own Mutual FundsChapters 2, 3, and 4 focus on the principal channels used by mutual fund–owning households topurchase fund shares. With the growth of 401(k) plans since 1990, employer-sponsored retirementplans have become a common channel through which households own mutual funds. In 2020,83 percent of mutual fund–owning households held funds through these plans. Sixty-three percentof mutual fund–owning households held mutual funds purchased outside employer-sponsoredretirement plans. Nearly half of mutual fund–owning households held mutual funds purchasedfrom the sales force channel, that is, through investment professionals, which include registered2 // ICI RESEARCH REPORT: PROFILE OF MUTUAL FUND SHAREHOLDERS, 2020
investment advisers, full-service brokers, independent financial planners, bank or savingsinstitution representatives, insurance agents, and accountants. Thirty-one percent owned fundshares purchased from the direct market channel, which consists of purchases made directly fromfund companies and through discount brokers. More than half of mutual fund–owning householdsheld mutual funds through multiple sources.6 In identifying their primary source for purchasingfunds, 59 percent of mutual fund–owning households pointed to employer-sponsored retirementplans, 29 percent reported the sales force channel, and 12 percent cited the direct market channel.Chapter 5 presents mutual fund–owning households by generation. Thirty percent were membersof Generation Z and the Millennial Generation (born between 1981 and 2012), and 31 percentwere members of Generation X (born between 1965 and 1980).7 The Baby Boom Generation (thoseborn between 1946 and 1964) represented a 31 percent share of mutual fund–owning households.Eight percent were members of the Silent and GI Generations (born between 1904 and 1945).8Figures in this chapter highlight how demographic characteristics, mutual fund ownership, financialassets, and savings goals vary among mutual fund–owning households by generation.Chapter 6 describes mutual fund–owning households by age. Twenty percent of individualsheading households owning mutual funds were younger than 35. The largest age group consistedof individuals between the ages of 35 and 54, who made up 39 percent of mutual fund–owninghousehold heads. Household heads aged 55 to 64 accounted for 21 percent of mutual fund–owninghouseholds. The remaining 20 percent of individuals heading mutual fund–owning households were65 or older. Figures in this chapter reveal how demographic characteristics, mutual fund ownership,financial assets, and savings goals vary among mutual fund–owning households by age group.Chapter 7 describes mutual fund–owning households by their level of household income.Twelve percent of mutual fund–owning households had incomes below 50,000, 31 percent hadincomes between 50,000 and 99,999, 24 percent had incomes between 100,000 and 149,999,and 33 percent had incomes of 150,000 or more. Figures in this chapter focus on how demographiccharacteristics, mutual fund ownership, financial assets, and savings goals vary among mutualfund–owning households by household income.ICI RESEARCH REPORT: PROFILE OF MUTUAL FUND SHAREHOLDERS, 2020 // 3
Chapter 8 examines mutual fund–owning households by household financial assets.Fourteen percent of mutual fund–owning households had financial assets of less than 50,000,10 percent had assets between 50,000 and 99,999, 20 percent had assets between 100,000and 249,999, and 56 percent had assets of 250,000 or more. Figures in this chapter show howdemographic characteristics, mutual fund ownership, financial assets, and savings goals vary amongmutual fund–owning households by household financial assets.Chapter 9 examines mutual fund–owning households by the level of investment risk respondentsare willing to take. Forty percent of mutual fund–owning households were willing to takeabove‑average or substantial investment risk for similar levels of financial gain, 42 percent werewilling to take average investment risk for average financial gain, and 18 percent were willing totake below‑average investment risk for below-average financial gain or were unwilling to takeinvestment risk. Figures in this chapter illustrate how demographic characteristics, mutual fundownership, financial assets, and savings goals vary among mutual fund–owning households by levelof investment risk.Chapter 10 describes mutual fund–owning households by the year of their initial mutual fundpurchase. Twenty-two percent of mutual fund–owning households purchased their first mutualfund before 1990, and 29 percent purchased their first mutual fund between 1990 and 1999.Twenty-five percent purchased their first mutual fund between 2000 and 2009, and 24 percent didso in 2010 or later. Figures in this chapter highlight how demographic characteristics, mutual fundownership, financial assets, and savings goals vary among mutual fund–owning households by yearof initial mutual fund purchase.Taken together, these chapters present an overview of the millions of US households that invest inmutual funds, the ways in which they purchase fund shares, and the ways in which they use funds tomeet their current and long-term financial needs.4 // ICI RESEARCH REPORT: PROFILE OF MUTUAL FUND SHAREHOLDERS, 2020
CHAPTER 1Mutual Fund–Owning HouseholdsDemographic CharacteristicsIn 2020, 58.7 million, or 45.7 percent of, US households owned mutual funds (Figure 1.1). The medianage of individuals heading households that owned mutual funds was 50 (Figure 1.2).9 More than halfof these individuals had college or postgraduate degrees. Sixty-nine percent of US households thatowned mutual funds consisted of couples who were married or living with a partner, and investmentdecisionmaking was a shared responsibility in 53 percent of mutual fund–owning households.FIGURE 1.158.7 Million US Households Owned Mutual FundsPercentage of all US households, 202054.3%Did not own mutual funds45.7%Owned mutual fundsTotal number of US households: 128.5 millionSources: Investment Company Institute and US Census BureauICI RESEARCH REPORT: PROFILE OF MUTUAL FUND SHAREHOLDERS, 2020 // 5
Employment Status and Household IncomeThe majority of the heads of mutual fund–owning households were employed and earned moderate,although above-average, household incomes. In 2020, 75 percent of individuals heading householdsthat owned mutual funds were em
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