Table 8
Total Mutual Funds Owned by Investors Who Own Stock Funds, 19891995
Total No. of
Percentage of Stock Fund Owners
Mutual Funds
1995
1992
1989
1
28
37
49
2
22
25
20
3
15
15
14
4
12
6
9
5
8
7
3
6 or more
16
10
4
Source: Tabulations from James M. Poterba, "Shareownership 1998," New York Stock Exchange,
1998, based on Surveys of Consumer Finance, 1989 and 1995.
lows: account statements, 65 percent; fund
The sites are becoming increasingly inter-
listings in a daily paper, 54 percent; mutual
active. Downloading capacity is available for
fund annual reports, 50 percent; professional
prospectuses on nearly a third of sites.
financial advisors, 38 percent; business mag-
Twenty-four percent allow customers to mon-
azine fund rankings, 35 percent; ranking and
itor their accounts on-line; 11 percent enable
information services, 13 percent; and on-line
them to exchange investments within a fund
services, 5 percent.
group. Another 6 percent are equipped to take
on-line purchase orders, and 5 percent allow
on-line redemption.4 4
Increased Use of Technology
Whereas 33 percent of households owned
Managers of 401(k) plans are also devel-
PCs in 1995, 56 percent of investors did.
oping interactive Web sites. A 1997 survey of
Households owning mutual funds were 28.6
plan providers found that 4 percent used
percent more likely to use the internet and 14.8
Internet enrollments, and 36 percent permit-
percent more likely to subscribe to on-line ser-
ted Internet balance inquiries.
vices than the population at large.4 2 The
Nasdaq Stock Market reported in 1997 that 7
The PSCA
Investment Behavior of the
percent of investors used on-line computer ser-
reports that the
vices to buy or sell stocks or mutual funds.4 3
Shareholder Class
percentage of
The best indicator of the growing relevance
of computers to the consumer market for cor-
In 1939, Sears, Roebuck & Co. president
plan providers
porate shares is not in the sketchy consumer
General R. E. Wood told the Senate Finance
who allow partici-
data but in the growth of Web services among
Committee, "We believe that a successful prof-
pants to reallo-
brokerages. A June 1997 survey of mutual-fund
it sharing plan does increase the employees'
companies found 51 percent of funds, and all
responsibility, it helps to avoid labor unrest
cate assets on a
of the fund groups with assets in excess of $50
and strikes, and gives the employee a feeling of
daily basis rose
billion, had Web sites. Two-thirds of the others
greater security and unity of interest with the
were planning to launch a site within the next
employer. We believe, if adopted generally, that
from 7.8 percent
two years. The companies use these sites pri-
profit sharing would lead to a more flexible
in 1990 to 61.3
marily to promote sales: 76 percent offer fund
wage scale. We believe firmly in the joint con-
percent in 1997.
perspectuses and 68 percent offer backgrounds
tribution of employees and employer. It creates
a feeling of mutual responsibility and trust."4 5
on portfolio managers.
15