Why have U.S. households increasingly relied on mutual funds to own equity?
By: John V. Duca.
Series: Research Department working paper ;; 0403; Working paper (Federal Reserve Bank of Dallas. Research Dept. : Online) ;; 0403.
Publisher: Federal Reserve Bank of Dallas
Published: 2004
Place of publication: [Dallas, Tx.]
Language: eng
Format: Electronic resource
Subjects: Mutual funds -- United States.; Stock ownership -- United States.
Description: "Since the early 1990s, U.S. households have increasingly used mutual funds to own equity assets. Results indicate that this owes to two developments over the period 1970-2002 that are broadly consistent with the implications of Heaton and Lucas' (2000) model of equity participation. In that model, lower asset transfer costs and lower income risk can induce equity investing by less wealthy households, who - in practice and owing to diversification considerations - are more apt to indirectly hold stocks through mutual funds. The first factor is a pronounced decline in equity mutual fund loads, which are highly negatively correlated with the overall stock ownership rate, which has doubled owing to a rising percentage of households that own stocks only through mutual funds. The second is a general improvement since the 1970s in household expectations about future family financial conditions that may have induced households at the margin to become shareholders"--Federal Reserve Bank of Dallas web site.
Notes: Also available in print.
Includes bibliographical references.
Title from PDF file as viewed on 1/19/2005.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.