Is the knock-down, drag-out industry fight over fees finally getting through to the masses?
It appears so, according to new research from the Investment Company Institute.
The overwhelming majority of mutual fund investors consider fees and expenses when selecting a fund, ICI finds in its annual report titled “What US Households Consider When They Select Mutual Funds, 2018.”
The survey also found that mutual fund investors consider the historical performance of a fund as well as a fund’s performance compared with an index.
In 2018, nine in 10 mutual fund-owning households considered the fees and expenses of a fund, with nearly 40% indicating that this information was “very important” when selecting their mutual funds.
More than nine in 10 mutual fund-owning households considered historical performance when selecting mutual funds, with slightly more than half indicating that historical performance was “very important.”
Eighty-eight percent of respondents considered a fund’s performance compared with an index, with 36% indicating it was “very important.”
“Mutual fund investors are typically saving for retirement, education, or other long-term financial goals,” Sarah Holden, ICI Senior Director of Retirement and Investor Research, said in a statement. “So it’s no surprise that households carefully consider many factors when choosing mutual funds, making informed choices to save and invest to meet their financial goals, as this report confirms.”
Mutual Fund Investors Consider Investment Objective, Risks and Ratings
In 2018, 90% of mutual fund-owning households considered the fund’s investment objective when selecting a mutual fund, with 38% agreeing it was “very important.”
Ninety-one percent considered the risk level of a fund’s investments when selecting mutual funds, with 37% indicating it was “very important” in their fund selection decision. Additionally, 75% of mutual fund-owning households said they consider a fund’s rating from a rating service, with 20% considering such a rating “very important” in their decision making.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
