Never miss a story — sign up for PLANSPONSOR newsletters to keep up on the latest retirement plan benefits news.
Investing October 21, 2004
Mutual Fund Holders use 'Buy-and-Hold' Strategy
October 21, 2004 (PLANSPONSOR.com) - A majority of
mutual fund holders are adopting a 'buy-and-hold' strategy,
with 60% of shareholders making no transactions in their
mutual funds in 2003.
Reported by Kip McDaniel
A study by the Investment Company Institute (ICI) found that of those who did make transactions, fund purchases outnumbered fund redemptions by more than a two to one ratio. Eighty-two percent of mutual fund owners said short-term fluctuations did not bother them and 84% said that they were willing to take on at least average risk or greater for comparable returns.
A separate report by ICI found that 48.1% of US households own mutual funds, up from last year but down from the 2001 peak of 52%. That amounts to almost 54 million households in America with mutual fund holdings. The median mutual fund balance for households who own them is $48,000, which represents 47% of the household savings. The average number of funds held was four.
Sixty-nine percent of mutual fund owners also owned IRAs and 84% said that they had defined contribution plans.The study also showed that the average mutual fund holder was 48 years old and had an average income of $68,700. Most were married and had college degrees.