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Mutual Fund Shareholders: Characteristics, Investor Knowledge, and Sources of Information

by Gordon J. Alexander, Ph.D.
University of Minnesota and
Office of Economic Analysis Securities and Exchange Commission
Jonathan D. Jones, Ph.D.
Division of Economic Research Office of Thrift Supervision,
Peter J. Nigro, Ph.D.
Economic and Policy Analysis Office of the Comptroller of the Currency

OCC Working Paper 97-13, December 1997


This paper analyzes the responses from a nationwide telephone survey of 2,000 randomly selected mutual fund investors who purchased shares using the services of six different intermediaries, referred to as distribution channels -- brokers, banks, mutual fund companies, insurance companies, employer-sponsored pension plans, and "other" (e.g., financial planners). The survey provides data on the demographic, financial, and fund ownership characteristics of mutual fund investors. Furthermore, it contains data on investors' familiarity with the costs and certain investment risks associated with mutual funds and the information sources used to learn about these costs and risks. Accordingly, it is possible to create a measure of each mutual fund investor's overall level of financial literacy. The results, given in Congressional testimony by OCC and SEC officials, discussed by the popular press, and cited in a recent SEC rule proposal, suggest that there is room for improvement in investor knowledge of the expenses and risks associated with mutual funds and that more can be done to make mutual fund prospectuses more useful to investors.


As with all OCC Working Papers, the opinions expressed in this paper are those of the author alone, and do not necessarily reflect the views of the Office of the Comptroller of the Currency or the Department of the Treasury.

Any whole or partial reproduction of material in this paper should include the following citation: by Alexander, Jones, and Nigro, "97-13 "Mutual Fund Shareholders: Characteristics, Investor Knowledge, and Sources of Information" Office of the Comptroller of the Currency, E&PA Working Paper 97-13, December 1997.


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