Mutual Funds Pass $10 Trillion Mark In Assets

Contributed by mm | November 13, 2006 11:38 AM PST

Baby boomers, exchange-traded funds and stock market performance were mentioned as forces behind the $10 trillion achievement of the mutual fund industry. Will the collective actions by baby boomers someday cause massive cash outflow?

From USA Today:

Somewhere around the time that the USA 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 ICI says.

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Comments

>>> Guest Commented on November 14, 2006

Let's do da math:
10 trillion / 80 million boomers = $125,000 per boomer.

Average boomer retires at 65 and lives till 75.
$125,000 / 10 years = $12,500 per year.
$12,500/12 = $1041.66 per month.

So the average boomer can expect about $1000/month to live on.....and this assumes that there is equal disbursement of all that money...the reality is a small percentage control a large portion of that 10 trillion. Tell me again why this isn't a crisis?

Pretty sad isn't it?

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