During the 1990s, stock and bond mutual funds grew ever more important to US investors. The number of distinct mutual funds tripled - to some 5,600 - according to Morningstar Inc. (The number is 12,000, if you include the multiple classes within categories.)
Meanwhile, total assets in mutual funds rose from just under $1 trillion at the beginning of the decade to slightly less than $7 trillion by the end of 2000, according to the ICI.
Fueling the mutual-fund industry's expansion for the decade: Strong economic and corporate profit growth, low inflation, technological innovation, impressive stock returns, and relatively low interest rates. Also, the continued strong growth of defined-contribution retirement plans and growing concern about retirement security expanded the role of mutual funds, says the ICI.
(c) Copyright 2001. The Christian Science Publishing Society