Filed Under:Life Insurance, Life Planning Strategies

Millionaire investors shifting mutual fund assets to ETFs

Photo credit: Thinkstock
Photo credit: Thinkstock

U.S. stock mutual funds remains the most widely held type of mutual funds among millionaire investors, but the affluent are devoting a greater share of their investable assets to domestic exchange-traded funds, according to new research.

The report, published by Lake Forest, Ill.-based Spectrem Group LLC, shows that domestic exchange-traded funds accounted for 20 percent of mutual fund assets held by millionaire households in 2012, up 15 percent in 2008. By contrast, investable assets held by millionaires in U.S. stock mutual funds dipped to 62 percent in 2012 from 67 percent in 2008.

Mutual fund assets held in international mutual funds also declined to 31 percent in 2012 from 42 percent in 2008. However, mutual fund assets held in non-municipal U.S. bond mutual funds increased to 28 percent in 2012 from 24 percent in 2008.

Technology and healthcare companies are the most cited industries (51 percent of respondents) that millionaires would invest in if they had money to invest, the report states. Less frequently cited are pharmaceuticals (40 percent), communications (32 percent), real estate (24 percent), financial services (20 percent), manufacturing (15 percent), transportation (10 percent), construction (8 percent) and automotive (6 percent).

On average 57 percent of Millionaire household assets are investable assets. The largest component is the principal residence (17% of investable assets), followed by defined contributions (10 percent), insurance and annuities (7 percent), real estate (7 percent), and privately held businesses.

By vehicle, rollover individual retirement accounts, including contributory and Roth IRAs, account for 26 percent of the total, followed by professionally managed accounts (25 percent), deposit accounts (12 percent), stocks and bonds (16 percent) and other investments 5 percent).

The report reveals that sixty five percent of Millionaires rely on an advisor to some degree to for assistance with their financial decisions, with the remainder making decisions with no assistance. 

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Nichole Morford

Nichole Morford
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