Growing Share of Young Households Own Mutual Funds

401k, retirement, mutual funds, ICI

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Get ‘em young.

Industry attempts to get individuals and households to begin saving at your ages appear to be working, with almost half of the 37 million households headed by a member of the Millennial Generation or Generation Z owning mutual funds in 2020.

New research from the Investment Company Institute (ICI) finds that 47% of these households owned mutual funds, up from 41% in 2019.

The survey results also show that saving for retirement was a financial goal for 94% of mutual fund-owning households, and 75% indicated that retirement saving was the household’s primary financial goal.

“Investors across generations use mutual funds to help meet their household’s most important financial goals, especially saving for retirement,” Sarah Holden, ICI senior director of retirement and investor research, said in a statement. “The data this year show increasing ownership of mutual funds among younger households, with mutual fund ownership among Millennials and members of Gen Z up significantly. The data show the central and expanding role funds play in the financial lives of American households of all ages.”

Households across all generations held mutual funds

Nearly 59 million U.S. households representing more than 102 million individual investors owned mutual funds in 2020, according to the study. Among the 42 million households headed by a Baby Boomer, 44% owned mutual funds, and their mutual fund holdings accounted for 43% of households’ mutual fund assets in 2020. These data reflect the fact that Baby Boomers have had decades to accumulate savings, as the study notes.

In addition, 54% of the 34 million Generation X households owned mutual funds, accounting for 31% of households’ mutual fund assets. Among the 37 million Generation Z and Millennial households, 47% owned mutual funds, holding 16% of household mutual fund assets—reflecting the shorter time of these younger generations to save and invest.

Other key findings include:

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