U.S. mutual funds now worth $10 trillion
By JOHN WAGGONER
USA Today
Somewhere around the time that the U.S. was adding its 300 millionth person, investors were adding their 10 trillionth dollar to mutual funds.
Fund assets stood at $9.7 trillion at the end of September, according to the Investment Company Institute, the industry's trade organization. Throw in assets of increasingly popular exchange-traded funds, which trade like stocks on exchanges, and fund assets blew past $10 trillion sometime in recent weeks. By comparison, the nation's entire gross domestic product is about $13.3 trillion.
Smashing the $10 trillion barrier is all the more remarkable because mutual-fund assets had plunged to $6.1 trillion in September 2002 as the 2000-02 bear market neared its close. Since then, investors have poured $566 billion, or an average of $11.6 billion a month, into stock funds alone, the institute says.
Over the past three decades, mutual funds have grown from a backwater on Wall Street to a cornerstone of Main Street. "They're a workhorse for many types of investors," says Michael Lipper, president of Lipper Advisory Services. Driving new money into the funds are:
Some funds have reached sizes barely imaginable even 10 years ago. The American Funds Growth Fund of America, the nation's largest mutual fund, has grown to $149 billion in assets — more than the entire industry had in 1979.
Assets passed $1 trillion in 1990 and could pass $20 trillion within 10 years, assuming 5 percent annual growth in investments and new money, says consultant Geoff Bobroff.
