The percentage of households invested in mutual funds has dropped drastically over the past seven years, says Hearts & Wallets, a source of retail investment data and analysis.
In 2010, 63 percent of households owned mutual funds. This year that number plummeted to 39 percent. The drop has been more profound among younger investors than older investors.
The decline has come at the same time that exchange-traded funds have dramatically proliferated and separately managed accounts have maintained their popularity, Hearts & Wallets says.
The numbers were part of two reports issued recently by the organization: “Investment Products & Assets Managers,” and “Active vs. Passive and Impact Investing” and were drawn from responses from 40,000 households in the Hearts & Wallets database.
The organization will do additional research in the future to try to determine more specifically why mutual funds are losing favorability.
Elsewhere in its reports, Hearts & Wallets found that younger investors are the most receptive to impact investing and that 70 percent of millennials included impact investing as one of their investment goals.