Financially, mutual fund investors better off than most people, poll says


It shouldn't come as a surprise, but those who own mutual funds are financially better off than most people. Not because their funds do so well, but because they have the disposable income to buy them in the first place.

A new survey by the Investment Company Institute, the fund industry trade group, found that mutual fund shareholders have a median household income of about $60,000 -- not bad considering that Census figures show that only 16.5 percent of American households have incomes in the $50,000 to $75,000 range.

The survey did not include those who own mutual funds through 401(k) plans. But Gerald O'Connor, research director for Access Research, a Connecticut pension consulting service, found that the same characteristics held for 401(k) plan participants as well as fund investors: the same general age, a slightly lower median income, but the same number of two-income households, 76 percent. "As a rule, they are typically more well off than the general work force," he said.

One finding that was somewhat surprising, said Sandy West, the institute's director of marketing and policy research, was that Generation X, the 18- to 30-year-olds, had more of their assets invested in mutual funds than did the older, more affluent Baby Boomers: 38 percent to 27 percent.

Not surprisingly, risk aversion is high, though how investors defined risk is unclear beyond a recognition that they could lose money in mutual funds. So, 49 percent of the investors said they were willing to take only average risk for average gain, and 16 percent wanted no risk at all.

But what "risk" means is subjective. "One person can think an aggressive growth fund isn't risky. Another can consider a 10-year bond fund too much risk," said Steve Savage, editor of the Value Line Mutual Funds Survey.

Pub Date: 8/18/96

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