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INDIVIDUALS SEEN MAKING "DRAMATIC CHANGE" IN PORTFOLIOS FROM 1980 THROUGH MID-YEAR 1992, SIA REPORT SHOWS

 INDIVIDUALS SEEN MAKING "DRAMATIC CHANGE" IN PORTFOLIOS
 FROM 1980 THROUGH MID-YEAR 1992, SIA REPORT SHOWS
 /ADVANCE/ NEW YORK, Nov. 12 /PRNewswire/ -- Individuals in the United States have made a "dramatic change" in their portfolios in the 1980-mid-1992 period, increasing direct or indirect ownership in equities, mutual funds and government securities, and reducing the relative level of bank instruments, Securities Industry Association researchers said Friday.
 Liquid financial assets of individuals grew to $7.9 trillion from $3.2 trillion in the period, Jeffrey M. Schaefer, senior vice president, research; and Grace Toto, statistics director, said in the current Investor Activity Report (IAR).
 In the same period, equities, plus mutual funds, grew to 45 percent of individual investors' financial assets from nearly 40 percent.
 Mutual funds alone grew to 16 percent from 4 percent, they said.
 Investors Show Growing Knowledge of Government Bonds
 In addition, individual investors have increased the relative size of federal, state and local bonds in their portfolio. In the 1980-mid- 1992 period, individuals' holdings of government bonds rose to 16 percent of total financial assets from 11 percent at the start of the precious decade, the SIA researchers said.
 "Individual investors have become much more knowledgeable about and interested in government and municipal bonds as a means of obtaining higher yields, liquidity and, to some extent, reducing tax burdens," they said.
 With the move toward equities, mutual funds and government bonds, the relative importance of bank deposits and certificates of deposit declined in portfolios of individuals to 37 percent from 48 percent, the researchers said.
 Institutional Holdings Topped 50 Percent In Second Quarter
 Further, according to recently released Federal Reserve System data, institutional holdings of U.S. equities surpassed the 50 percent mark for the first time in history during the second quarter, largely reflecting a long-term trend by individuals to invest indirectly through institutions.
 The trend toward institutional holdings and away from direct individual investment has been building since the mid-1960s, Mr. Schaefer and Ms. Toto said.
 In the second quarter, institutions held 50.3 percent of U.S. equities outstanding, while the household sector, a proxy for individuals, held the remainder. The Federal Reserve includes in the household sector holdings of personal trusts and non-profit organizations. In 1965 institutions held about 15 percent of U.S. equities outstanding, while the remainder were held by individuals.
 Within the institutional category in the second quarter, private pension fund holdings increased to 20.6 percent as of June 30, 1992 from 14.2 percent of shares outstanding at year-end 1980. Public pension fund holdings increased to 8.7 percent in the quarter from 2.8 percent in 1980.
 But, the category which pushed institutional holdings over the 50 percent mark was mutual funds, which advanced to 8.8 percent at quarter- end from 2.7 percent at year-end 1980, Mr. Schaefer and Ms. Toto said.
 In the last analysis, they noted, institutional holdings are largely owned for individuals.
 Based upon data from the Investment Company Institute, about 30 percent of the "equity" and "bond and income" mutual funds were held by institutions, while 70 percent were owned by individuals, Mr. Schaeffer and Ms. Toto estimated.
 As of June 1992, there was about $910 billion in assets in "equity" and "bond and income" mutual funds. Federal Reserve flow of funds data show about $402.5 billion of stock was held by mutual funds.
 Assuming 70 percent of the later amount belongs to individuals, they indirectly hold about $280 billion of equity through mutual funds, Mr. Schaefer and Ms. Toto said.
 Thus, based upon SIA estimates, households own 55.9 percent of common stock outstanding either directly or through mutual funds, they said.
 Clearly, "individuals still have an important stake in the stock market," despite the change in how equities are held, they emphasized.
 IAR is an SIA subscription-based publication.
 -0- 11/12/92 R
 /CONTACT: Art Samansky or Karen San Antonio of Securities Industry Association, 212-608-1500/ CO: Securities Industry Association ST: New York IN: FIN SU:


SM-OS -- NY068 -- 0846 11/13/92 16:18 EST
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