Mutual Fund Factbook Now Online

June 12, 2001 ( - The Investment Company Institute has just published a new factbook on mutual funds as part of its investor awareness program.

According to the ICI, mutual fund shareholders do not “drive” the market, with households, pension funds and insurance companies directly owning about 80% of the equities in the US stock market, leaving the remainder in the hands of mutual funds. 

On the Rebound

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And in a year when US stock indexes stumbled, mutual fund shareholders bought a record $309 billion in US equity funds.  Inflows in 1999 were only about half that ($188 billion), despite much stronger market performance.

The ICI report estimates that 82% of new sales of long-term funds of all types were bought through a third party or intermediary in 1999, up from 77% in 1990.  At the same time new sales directly from mutual fund companies declined to 18% from 23%.

Nontraditional, third-party distribution channels, including employer-sponsored pension plans, mutual fund supermarkets, fee-based advisors, mutual fund wrap account programs, and bank trust departments have expanded their role, pushing direct fund sales to investors over the past decade down to 43% of the total from 62% in 1990.

The ICI also cites a recent survey where 82% of mutual fund investors said they hadn’t sold equity shares from any holding in at least a year, and another 9% had made just one trade during that time.

Cost Cutting?

The report notes that total shareholder costs are decreasing, but appears to draw that conclusion from the fact that 78% of investor accounts are in funds that charge less than the average stock mutual fund expense ratio of 1.55%. 

The report also notes that since 1980, the average cost of investing in equity mutual funds has decreased 40%, with bond funds a decrease of 29% and with money market funds 24%.  However, that decrease is related to the emergence of multiple share classes, and the decline in the number of load fund offerings.

As its final “fact”, the ICI notes that mutual funds clearly disclose all fees.

The full report is at