SIC 6722 Management Investment Offices—Open-End

Extract

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SIC 6722 Management Investment Offices—Open-End

SIC 6722

The open-end management investment industry is comprised of investment companies that sell shares in open-end mutual funds. Open-end funds require the issuing company to redeem the shares upon request by the security holder. Often referred to as the mutual fund industry, the open-end fund industry comprises about 95 percent of the mutual fund market. Unit investment trusts, face-amount certificates, and closed-end mutual funds are excluded from this classification. Mutual fund management firms that work for investment companies are part of the investment advice industry discussed in SIC 6282: Investment Advice.

NAICS CODE(S)

525910

Open-End Investment Funds

INDUSTRY SNAPSHOT

The mutual fund industry experienced explosive growth in the 1980s that continued through the mid-2000s, as investors transferred assets from other financial sectors into mutual funds, and investments in general increased. U.S. open-end mutual funds controlled more than $8.1 trillion in assets by mid-2005, making them a major force in the country's economy. In 2005, nearly 50 percent of all U.S. households owned shares in mutual funds, which was up from 6 percent in 1980. During 2004, assets in funds by more than $800 billion, compared with 2003. More than 8,100 such open-ended funds were in existence in the mid-2000s.

Following unprecedented industry growth throughout much of the 1980s, mutual fund assets continued to increase rapidly through the 1990s. A strong securities market, as well as an influx of new dollars from other financial sectors, contributed to the surge. Although mutual funds nourished the U.S. economy in many ways, such as providing capital to some thinly traded securities markets, the growing industry was also cit...

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