Mutual Fund Owners, 2004 October 2004 Investment Company Institute Figure 1 Today’s Presentation ICI’s Most Recent Research Publications • US Household Ownership of Mutual Funds in 2004 • 2004 Profile of Mutual Fund Shareholders Figure 2 US Household Ownership of Mutual Funds Background • Annual survey of 3000 US households • Provides national household ownership of mutual funds and estimate of individual owners • Identifies fund ownership inside employer- sponsored retirement plans and in the retail market Figure 3 2004 Profile of Mutual Fund Shareholders Background • Survey of 3500 mutual fund owners • Conducted every 3 years: 1998, 2001, 2004 • In-depth questions about household characteristics and mutual fund investments Figure 4 Ownership of Mutual Funds Percent of US Households 44.0 47.4 49.0 52.0 49.6 47.9 48.1 1998 1999 2000 2001 2002 2003 2004 Millions of US Households 44.4 48.4 51.7 56.3 54.2 53.3 53.9 Source: US Household Ownership of Mutual Funds, ICI, 2004 Figure 5 Highlights from 2004 Profile • Shareholders represent middle American households • Shareholders have a long-term investment perspective • Shareholders exhibit a ‘buy and hold’ strategy, even through market volatility Figure 6 Mutual Fund Owner Characteristics Middle-aged Moderate income Moderate financial assets Married College degree or more Retired from primary occupation 48 Years* $68,700* $125,000* 71% 56% 21% *median Source: Profile of Mutual Fund Shareholders, ICI, 2004 Figure 7 Investing Profile of Mutual Fund Owners Mutual fund balance Percent of household savings Number of funds Hold equity mutual funds Own IRA Own defined contribution plan account $48,000* 47%* 4* 80% 69% 84% *median Source: Profile of Mutual Fund Shareholders, ICI, 2004 Figure 8 Generation of Mutual Fund Shareholders (Percent) 23% 4% 24% 49% Generation X (born 1965-1976) Generation Y (born 1977+) Silent Generation (born before 1946) Baby Boom Generation (born 1946-1964) Source: Profile of Mutual Fund Shareholders, ICI, 2004 Figure 9 Indicators of Long-Term Investing • Not concerned about short term market fluctuations • Retirement is primary investment goal • Have owned a fund portfolio > 10 years • Tend to rely on professional investment advice 82% 72% 70% 71% Source: Profile of Mutual Fund Shareholders, ICI, 2004 Figure 10 Primary Source of Fund Purchases 59% 30% 11% Inside Defined Contribution Plan Sales Force/ Advisor Direct Market/ Discount Broker Source: Profile of Mutual Fund Shareholders, ICI, 2004 Level of Acceptable Investment Risk for Comparable Gain Figure 11 6% 29% 49% 10% 6% Substantial Above Average Average Below Average None Source: Profile of Mutual Fund Shareholders, ICI, 2004 Figure 12 Mutual Fund Transactions in 2003 Sold Only 22% 11% 7% 60% Did Not Transact Bought Only Both Bought and Sold Note: Excludes automatic transactions Source: Profile of Mutual Fund Shareholders, ICI, 2004 Shareholder Changes Between 1998 and 2004 Figure 13 • Greater mutual fund balances per household (1998 median – $25,000; 2004 median – $48,000) • Shareholder age is increasing (1998 median – 44 years; 2004 median – 48 years) • More shareholders buying first fund through DC plans (1998 – 47%; 2004 – 58%) • Increased ownership of IRAs (1998 – 57%; 2004 – 69%) • Greater use of intermediated channels (1998 – 77%; 2004 – 84%) Source: Profile of Mutual Fund Shareholders, ICI, 2004 Source: Profile of Mutual Fund Shareholders, ICI, 2004 (www.ici.org/pdf/rpt_profile04.pdf)