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The variety of US households invested in mutual funds has grown, whilst long-term mutual funds skilled outflows in 2023, in keeping with the Funding Firm Institute’s 2024 Funding Firm Factbook.
In complete, 68.7mn households, or simply over half of US households, have been invested in mutual funds in 2023, up from 58.7mn households in 2020.
These households had $18.6tn invested in long-term mutual funds and $3.9tn in cash market funds, which accounted for 88 per cent of mutual fund complete web belongings, whereas the rest got here from institutional traders, which had $2tn invested in cash market funds and $1tn invested in long-term mutual funds.
Though long-term mutual funds skilled $665bn of outflows in 2023, this was offset by $957bn of web inflows to cash market funds, in keeping with ICI knowledge.
This text was beforehand revealed by Ignites, a title owned by the FT Group.
In consequence, mutual funds skilled web inflows of $292bn in 2023, bouncing again from web outflows of $1.1tn in 2022.
The information additionally confirmed variations in the kind of publicity sought by totally different generations, with the next share of youthful traders uncovered to cryptocurrencies, whereas the next share of older traders held mutual fund publicity.
Actively managed mutual funds have declined in recognition lately. The proportion of invested belongings in lively mutual funds dropped from 60 per cent to 52 per cent in simply three years, whereas curiosity in index-based alternate traded funds and index-based mutual funds has risen, finally amounting to nearly half of the $33.9tn of complete web belongings available on the market.
ICI’s report additionally detailed the variations in funding technique between full-service brokers and fee-based advisers: brokers invested extra in mutual funds and variable annuities, whereas advisers centered extra on ETFs.
*Ignites is a information service revealed by FT Specialist for professionals working within the asset administration business. Trials and subscriptions can be found at ignites.com