Investment And Investor Demographics

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As of Dec. 31, 1961, there were 195 investment companies that were members of The Investment Company Institute, and had total assets of approximately $25 billion. Some 170 were open-end companies with assets of approximately $23 billion, and 25 were closed-end companies, with assets of around $2 billion.

Net capital contributions in 1961 were approximately $1.8 billion. This net capital change represents the amount of new funds raised by investment companies, less the amount of their own securities, which they have repurchased.

The past 20 years have seen an extraordinary expansion in almost every type of savings and savings institution. Investment company assets are still small in relation to those of life insurance companies, and their year-to-year growth is not dwindling.

One difference between investment companies and other forms of savings is noteworthy. Change in the dollar value of the other forms of savings are comparatively minor because of the nature of their assets, that is, a rise in the dollar amount of assets represents almost entirely added funds received from the insured, from depositors, or from bondholders. Common stock holdings predominate in the case of investment companies. Accordingly, changes in the dollar value of their assets do not necessarily correspond to changes in new funds contributed by shareholders. The biggest factor in the change in investment company assets may be fluctuations in the stock market. To illustrate, between the end of 1953 and 1954, net assets of open-end companies rose from about $4.1 billion to $6.1 billion, whereas the net amount of new funds raised through the sale of shares amounted to less than $500 million.

The number of shareholder accounts of companies that are members of The Investment Company Institute is reported to exceed 4.5 million. An almost continuous growth has taken place since the early 1930s. These accounts do not represent individual shareholders. Many investors hold shares in more than one investment company. It is estimated that the number of institutions and individuals represented by these accounts is around half the number of shareholder accounts. The number of shareowners of all corporations, according to studies made by the New York Stock Exchange, was 12.6 million in 1958.

A study based on a representative sampling of shareholders of 12 different mutual funds shows that the typical investor is 55-years-old and holds mutual fund shares valued at approximately $4,200 (1958); his most recent purchase of these shares amounted to slightly less than $1,000. Apparently, average holdings and purchases were smaller years ago, if accumulation plans involving small periodic purchases are excluded. The typical mutual fund shareholder also owns corporate stocks directly, with a value of approximately $8,200; he has bank deposits and United States Savings Bonds worth $3,200 and life insurance in the amount of $8,500. Annual family income is approximately $6,500.

The average investor in closed-end investment companies is also 55-years-old. His annual family income is almost $8,900; besides his investment company shares, he has accumulated individual stocks and savings worth slightly less than $22,000.

Occupationally, professional people are the largest category of holders, about 30 percent; roughly 20 percent are in the executive-administrative group. Retired persons are third among the "lump-sum" purchasers. Those in the over-60 age group form the largest category of regular account holders; persons in the 30-40-years age group make up about 60 percent of the accumulation-plan holders.

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