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ARCHIVE
Grow Your Money Skills…It’s Financial Literacy Month!
By Miriam Bridges
April 1, 2021
April showers bring…Financial Literacy Month!
Financial literacy will equip you with money skills. Good money habits and skills will lead you to greater financial well-being—and help you achieve things such as education, home ownership, and a comfortable retirement. And those will last a lot longer than May flowers.
The ICI Education Foundation (ICIEF) works to promote investment education, so we’re going to share a few resources you can use to build your investment and savings skills this month.
- If you’re a parent looking to help your children learn about investing and reaching long-term financial goals, ICIEF has two digital resources available to help you help them. (And you may learn a few things yourself!) Explore essential investing basics such as diversification, compound interest, and risk while you travel through the Investing Road Trip. Then, put those investing basics into action by Playing the Long Game. Invest $1,000 in the S&P 500, follow the market, and see what works best—staying invested or trying to time the market.
- If you’re new to investing, it’s important to understand key concepts. ICIEF offers a helpful series examining different investing basics that are essential to successful investing. Learn about risk, diversification, the benefits of mutual funds, the cost of investing, and more.
- If you’re in college, see if SFEPD is offering financial literacy workshops and seminars on your campus.
- If you’re in the workforce, the Alliance for Investor Education offers a wide range of information to help you make wise investment decisions.
- If you’re committed to financial smarts for young people, take a look at the Jump$tart Clearinghouse—a comprehensive online library of financial education resources—by the Jump$tart Coalition for Personal Financial Literacy. This website offers resources from dozens of national organizations that share a commitment to advancing youth financial literacy.
- If you’re an educator, the Maryland Council on Economic Education offers a wide variety of lessons and educational tools to support teachers.
- Looking for more? The American Savings Education Council offers resources by goal, age, and circumstance.
- Stay tuned for an upcoming program sponsored by an ICIEF grant—the University of the District of Columbia’s Financial Literacy Initiative Program (FLIP)!
Last, follow @ICIEF on Twitter to find other investment education materials we’ll promote…and maybe a quiz or two to test your money IQ! (You can also find ICIEF on Facebook and LinkedIn.) And use #FLM21 to learn more from other organizations committed to money skills.
Miriam Bridges is vice president of the ICI Education Foundation.
Permalink: https://www.ici.org/viewpoints/21_view_finlitmonth
TOPICS: 401(k)Equity InvestingIRAInvestment EducationInvestor ResearchMutual FundRetirement PolicySavingsShareholder
Traditional and Roth IRAs Offer Choice and Flexibility
By Sarah Holden and Daniel Schrass
March 29, 2021
Whether opened with rollovers or contributions, whether traditional or Roth, individual retirement accounts (IRAs) offer investors access to a world of investing. With $12.2 trillion in assets, IRAs represent more than one-third of total US retirement market assets and more than one-tenth of all US household financial assets. In mid-2020, 47.9 million US households, or 37.3 percent, owned IRAs.
TOPICS: Equity InvestingIRARetirement ResearchSavingsShareholder
Fund Investors’ Expenses Are Falling on Both Sides of the Pond
By Shelly Antoniewicz, James Duvall, and Giles Swan
March 24, 2021
Data on UCITS ongoing charges have become more widely available to investors in recent years. Enhancements to costs and charges disclosures that UCITS and distributors make available to investors have provided them with a wealth of beneficial information, which we believe can be further enhanced.
TOPICS: Equity InvestingEuropeFund RegulationICI GlobalInternationalShareholder
To Do: Check Your Savings Goals This Week!
By Miriam Bridges
February 22, 2021
This week, the Investment Company Institute (ICI) and the ICI Education Foundation (ICIEF) are joining thousands of corporations, nonprofits, government agencies, and individuals to celebrate America Saves Week. This annual campaign encourages Americans to assess their financial situations, set savings goals, and implement plans to achieve them.
TOPICS: 401(k)Equity InvestingIRAInvestment EducationInvestor ResearchMutual FundRetirement PolicySavingsShareholder
Main Street Owns Wall Street
By Sarah Holden and Michael Bogdan
February 10, 2021
Stock ownership used to conjure up images of Wall Street—but today people all up and down America’s Main Streets own stocks and are counting on stock ownership to help realize their financial goals. Today, more Americans own stock than in the past—and stock ownership has become increasingly common for lower- and middle-income households.
TOPICS: Equity InvestingInvestor ResearchMutual FundRetirement PolicySavingsShareholder
Understanding Indexes and How Funds Use Them
By Matthew Thornton
January 28, 2021
Beyond the well-known indexes that we encounter daily lie more than three million indexes designed to reflect the performance of underlying investments, from broad markets to niche subsegments. Indexes vary widely with regard to their specific objectives, the methodologies on which they are built, and the underlying investments they reflect.
TOPICS: Equity InvestingExchange-Traded FundsFinancial MarketsFund RegulationIndex Fund
Value Is in the Eye of the UCITS Holder
By Giles Swan
December 3, 2020
ICI research shows a steady decline in the cost of UCITS investing. European regulators are looking beyond just declining cost, however, by requiring UCITS managers to justify the value of these funds to investors. But how do investors assess value relative to cost, and what is the role of regulators?
TOPICS: Equity InvestingEuropeFund RegulationICI GlobalInternationalShareholder
IRA Investors Are Concentrated in Lower-Cost Mutual Funds
By James Duvall
July 30, 2020
Individual retirement accounts (IRAs) represent the largest share of assets in the US retirement market, with assets totaling $11.0 trillion at year-end 2019. As part of an ongoing effort to shed light on important insights into IRA investing, ICI is updating its analysis of expense ratios that investors pay on mutual funds in their IRAs.
TOPICS: 401(k)Bond FundEquity InvestingIRAMutual FundRetirement ResearchShareholder
For Funds' Use of Derivatives, a Promising New Regulatory Framework
By Paul Schott Stevens
April 22, 2020
In a promising new proposal on the use of derivatives, the SEC has consolidated cumbersome regulatory framework into a single, comprehensive rule that is carefully designed to protect investors.
TOPICS: Equity InvestingExchange-Traded FundsFund RegulationMoney Market FundsMutual FundShareholder
ETFs Are Passing the COVID-19 Crisis Test
By Shelly Antoniewicz
March 17, 2020
How have exchange-traded funds (ETFs) weathered the intensifying financial market fallout from the COVID-19 pandemic? So far, it looks like ETFs are healthy and robust.
TOPICS: Equity InvestingExchange-Traded FundsFinancial MarketsFinancial StabilityIndex FundTrading
Talkin’ ’Bout the Generations: ICI Research on Mutual Fund Ownership by Generation
By Michael Bogdan and Candice Gullett
December 11, 2019
Talk about the differences between generations is a hot topic in today’s cultural conversation. And the Millennial and Baby Boomer generations are in the middle of a little generational warfare. But when it comes to owning mutual funds, are there really that many differences?
TOPICS: 401(k)Equity FundEquity InvestingIRAInvestor ResearchMoney Market FundsRetirement ResearchSavings
Five Key Points on 401(k) Plan Fees from ICI Research
By James Duvall and Steven Bass
October 23, 2019
Thanks to innovation and a competitive market, 401(k) mutual fund fees keep falling. ICI has a window into this information through our study of the cost of providing 401(k)s, in which we take a close look at the expenses and fees of mutual funds incurred by 401(k) plan investors, and in related research on fund fees through a collaborative research effort between ICI and BrightScope.
TOPICS: 401(k)Equity InvestingMutual FundRetirement ResearchShareholder
IRA Investors Are Concentrated in Lower-Cost Mutual Funds
By James Duvall
August 20, 2019
Individual retirement accounts (IRAs) represent the largest share of assets in the US retirement market, with assets totaling $8.7 trillion at year-end 2018. Forty-six percent of this total is held in mutual funds, with IRA mutual fund investors primarily invested in equity funds. As part of ICI’s ongoing efforts to shed light on important insights into IRA investing, ICI is updating its analysis of expense ratios that investors pay on mutual funds in their IRAs....
TOPICS: 401(k)Bond FundEquity InvestingIRAMutual FundRetirement ResearchShareholder
Even in Bear Markets, Equity Fund Investors Stay the Course
By Shelly Antoniewicz
December 21, 2018
With the S&P 500 on a downward trajectory since early October, we’ve seen many headlines in the financial press of an impending bear market in US stocks and the potential for retrenchment by investors. But just as we showed that bond investors aren’t stampeding the exits in another recent ICI Viewpoints, “Debunking Assumptions About Bond Mutual Funds’ Flows and Bond Sales,” equity fund investors’ reactions to substantial declines in stock prices are less dramatic than the popular belief would suggest....
TOPICS: Equity InvestingExchange-Traded FundsMutual Fund
Stock Ownership in the United States: It’s Main Street
By Sarah Holden
September 10, 2018
US household activity in the stock market has undergone a transformation over the past three decades. The old idea that investing in the stock market is just for the wealthy is vastly out of date.
In the late 1980s, less than a third of US households held stocks. Now, a majority do. This growth in stock-owning households has occurred across all income quintiles....
TOPICS: Equity InvestingInvestor ResearchRetirement PolicySavingsShareholder
IRA Investors Are Concentrated in Lower-Cost Mutual Funds
By James Duvall
August 8, 2018
Individual retirement accounts (IRAs) represent the largest share of assets in the US retirement market, with assets totaling $9.2 trillion at year-end 2017. Forty-seven percent of this total is held in mutual funds, with IRA mutual fund investors primarily invested in equity funds. As part of ICI’s ongoing efforts to shed light on important insights into IRA investing, ICI is offering an updated analysis of expense ratios that investors pay on mutual funds in their IRAs....
TOPICS: 401(k)Bond FundEquity InvestingIRAMutual FundRetirement ResearchShareholder
Fund Investors Will “Run”? Sorry, Charlie Brown
By Sean Collins and Sarah Holden
March 7, 2018
For decades, Charles Schulz kept us in suspense: surely this time, Lucy would let Charlie Brown kick the football. Nope. Every time, at the last second, she pulled the ball away—and Charlie Brown fell flat on his back.
We’ve seen the same gap between wish and fulfillment around market turmoil and mutual funds. For decades, commentators have predicted that investors in stock and bond funds, faced with market turmoil, would redeem en masse, perhaps adding to the market turmoil. Despite plenty of opportunities, that just hasn’t happened.
Stock market turmoil in February provides yet another example of this...
TOPICS: 401(k)Bond FundEquity InvestingFinancial MarketsFinancial StabilityInterest RateInvestor ResearchMutual FundRetirement ResearchTrading
Pointing Fingers at Index Funds Won’t Explain Market Volatility
By Shelly Antoniewicz
February 14, 2018
With all the recent volatility in the US stock market, two questions are frequently being asked:
- Are fund investors fleeing the stock market?
- Are index funds causing market turbulence?
The short answer to both questions is no.
Experience and research show that investor flows to and from mutual funds and exchange-traded funds (ETFs) tend to track market returns. ...
TOPICS: Equity InvestingExchange-Traded FundsFederal ReserveFinancial MarketsFinancial StabilityIndex FundInterest RateInvestor ResearchMutual FundTrading
Applying Evidence to Theories on Regulated Funds
By Sean Collins
October 12, 2017
Late last month, the Financial Stability Oversight Council (FSOC) voted to rescind its designation of American International Group (AIG). After requiring a bailout during the financial crisis, the insurer was designated as a non-bank “systemically important financial institution,” or SIFI, in 2013. When FSOC conducted its most recent annual review, it decided AIG no longer warranted “systemic” status.
TOPICS: Bond FundEquity InvestingFinancial MarketsFinancial StabilityFund RegulationMutual FundTreasury
Average Expense Ratios for Index ETFs Have Declined
By Shelly Antoniewicz, Sean Collins, James Duvall, and Morris Mitler
May 24, 2017
In yesterday’s ICI Viewpoints post, we noted that our annual report on the asset-weighted average expense ratios of funds—“Trends in the Expenses and Fees of Funds, 2016”—showed that expenses for long-term mutual funds continued to decline in 2016.
TOPICS: Bond FundEquity InvestingExchange-Traded FundsFixed IncomeIndex FundInterest RateMutual Fund
Average Expense Ratios for Long-Term Mutual Funds Continued to Decrease in 2016
By Morris Mitler and Sean Collins
May 23, 2017
ICI recently released its report on the expense ratios of mutual funds: “Trends in the Expenses and Fees of Funds, 2016.” This is ICI's first report that also summarizes expense ratios for exchange-traded funds (ETFs).
TOPICS: Bond FundEquity InvestingExchange-Traded FundsFederal ReserveFixed IncomeInterest RateMoney Market FundsMutual Fund
A Proposal that Should Be Popped
By Paul Schott Stevens
December 15, 2016
The following ICI Viewpoints is a letter to the editor by Paul Schott Stevens, president and CEO of the Investment Company Institute, in response to an op-ed published on December 7, 2016, in the New York Times, “A Monopoly Donald Trump Can Pop.”
Millions of Americans could lose the low costs and broad diversification of fund investing under the dangerous proposal outlined in the op-ed by Posner, Weyl, and Morton.
TOPICS: Bond FundEquity InvestingExchange-Traded FundsFinancial MarketsFund RegulationMutual FundTrading
Fund Fees Have Been Falling for Two Decades
By Paul Schott Stevens
October 19, 2016
The following ICI Viewpoints is a letter to the editor by Paul Schott Stevens, president and CEO of the Investment Company Institute, in response to an editorial published on October 9, 2016, in InvestmentNews, “DOL fiduciary rule may finally spark lower fund fees for mutual funds.” It appeared in the print edition of the publication on October 17, 2016.
TOPICS: Bond FundEquity InvestingFund RegulationInvestor ResearchMutual FundShareholder
The Liquidity Provided by ETFs Is No Mirage
By Todd Bernhardt
June 20, 2016
The article above ignores fundamental information about ETFs, the behavior of investors, and the effects of market structure on the ETF product.
TOPICS: Bond FundBondsEquity InvestingExchange-Traded FundsFinancial MarketsFinancial StabilityFixed Income
Traders, Start Your Engines: After August 24, Exchanges Need to Coordinate
By Jennifer Choi and George Gilbert
November 30, 2015
The extraordinary volatility in U.S. equity markets on August 24, 2015, exposed a significant deficiency in the rules governing these markets’ structure: a lack of harmonization across securities exchanges for reopening trading after a “limit up–limit down” trading halt in a security.
TOPICS: Equity InvestingEuropeExchange-Traded FundsFinancial MarketsFinancial StabilityFixed IncomeFund Regulation
Mutual Fund Investments in Private Placements: an Overview
By Gregory M. Smith
November 23, 2015
Given recent media interest in mutual fund investments in private placements, it might be helpful to review mutual fund disclosure and valuation obligations. How do funds handle securities that are not publicly traded?
TOPICS: Bond FundEquity InvestingFund GovernanceFund RegulationInvestment EducationMutual FundOperations and TechnologyTrading
U.S. Bond ETFs Resilient on August 24
By Shelly Antoniewicz
November 20, 2015
Some observers have suggested that equity market volatility on August 24, 2015, spilled over into other markets and products, in particular to bond exchange-traded funds (see, for example, Bank of England Financial Stability Paper, no. 34, October 2015, pages 26 and 27). In our analysis of the events of that morning, we conclude that U.S. bond ETFs were resilient and largely immune to the turmoil in the equity markets.
TOPICS: Bond FundBondsEquity InvestingEuropeExchange-Traded FundsFinancial MarketsFinancial StabilityFixed IncomeFund Regulation
The Wall Street Journal’s Dangerous Disservice to Investors
By Mike McNamee
September 22, 2015
For 75 years, mutual funds have successfully met their regulatory obligation to fulfill redemption requests within seven days, meeting investor demands and delivering on their investment objectives through good markets and bad.
Yet the Wall Street Journal seems determined to ignore this established history and the circumstances surrounding it. It has created a liquidity “measure” of its own devising—a test that no regulator has endorsed and no informed market participant would credit. The newspaper uses its self-invented process to imply that bond mutual funds are “pushing the limits” of Securities and Exchange Commission (SEC) guidelines governing fund liquidity.
TOPICS: Bond FundBondsEquity InvestingExchange-Traded FundsFinancial MarketsFinancial StabilityFixed IncomeFund GovernanceFund RegulationMutual Fund
New York Times Paints False Picture of Funds’ Emerging Market Investments
By Mike McNamee
August 24, 2015
With the global market turmoil over the past week, it’s no surprise that journalists are looking for hot stories of panic, investor flight, and impending crisis. Either they believe that investors are inherently flighty and panic-prone, or they believe that “this time is different” and investors who have not panicked before will panic now.
TOPICS: Bond FundBondsEquity InvestingEuropeFinancial MarketsFinancial StabilityFixed IncomeICI GlobalInternationalMutual Fund
How Millennials Are Shaping the Evolution of Investment Advice
By Christina Kilroy
June 2, 2015
The future of investment advice—as embodied in the youngest cohort of working Americans, known as the Millennial Generation—was the focus of a panel of financial services industry leaders at ICI’s 57th General Membership Meeting. The approximately 75 million 18- to 34-year-olds that make up the group have now overtaken Generation X (ages 35 to 50) as the largest generational group in the workforce, according to Pew Research Center.
TOPICS: Equity InvestingEventsGMMInvestment EducationMutual Fund
Sizing Up Mutual Fund and ETF Investment in Emerging Markets
By Chris Plantier
August 18, 2014
In coming decades, emerging market (EM) economies will need substantial new capital to accompany and sustain their rapid growth.
TOPICS: Bond FundBondsEquity InvestingEuropeExchange-Traded FundsFinancial MarketsFinancial StabilityFixed IncomeFund RegulationICI GlobalInternationalMutual Fund
Some Facts About Roth IRAs and the Investors Who Use Them
By Todd Bernhardt
July 17, 2014
Since the individual retirement account (IRA) was created as part of the Employee Retirement Income Security Act of 1974 (ERISA), it has become a resounding success, accounting for the largest pool of assets in the U.S. retirement market. By the end of 2013, Americans held $6.5 trillion in IRAs, with 45 percent of that total—$3.0 trillion—invested in mutual funds.
TOPICS: Bond FundEquity InvestingFixed IncomeInvestment EducationInvestor ResearchMutual FundRetirement ResearchSavings
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