Finance Review

The ICI study says about three-quarters of households that owned mutual funds through tax-deferred accounts held funds in employer-sponsored retirement plans. In 2008, 35.9 million households held mutual funds through employer-sponsored retirement accounts—14.4 million only inside employer-sponsored plans and 21.5 million both inside and outside these plans.

Mutual fund ownership has largely been fueled by the growth of DC plans. Last month, an ICI and Securities Industry and Financial Markets Associate (SIFMA) report revealed that while overall household equity ownership has fallen off since 2001, defined contribution retirement plan sponsorship by employers have kept equity ownership rates up (see “DC Plans Keep Equity Ownership Alive”).

According to the study, an estimated 52.5 million U.S. households, or 45%, owned mutual funds in 2008, and an estimated 48 million households owned mutual funds inside tax-deferred accounts, compared with 21 million households owning funds outside tax-deferred accounts. Among those households that owned funds outside tax-deferred accounts, about three-quarters also held funds in tax-deferred accounts.

ICI points out that the number of households owning mutual funds through tax-deferred accounts has grown by 12 million since 1998, while the number of households owning mutual funds outside tax-deferred accounts has stayed about the same.

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