mutual funds history

For the U.S., the first American one was the New York Stock Trust, established in 1889.

The Wellington Fund was the first fund that included both stocks and bonds.

It was founded in 1928.

The stock market crash of 1929 slowed the growth of the mutual fund industry.

Then, Congress passed the Securities Act of 1933 and the Securities Exchange Act of 1934, which require funds registration with the SEC and offering an investment prospectus with their product offerings.

Another legislative milestone was the Investment Company Act of 1940 that guides funds industry of today.

The 1970's saw the introduction of so-called "no load" funds, which are funds with no sales commission.

Funds created on the no-load basis included the Vanguard Group, perhaps the most successful of such funds still in existence today.

Mutual Funds History - Recent Events

Mutual fund industry growth accelerated with the changes made to the Individual Retirement Account (IRA) provisions in 1981, which favored mutual fund investments.

According to Thompson Financial (12/31/03) information, there are more than 14,000 mutual funds currently in existence.

That's up from around 10 or so in the late 1920's.

To read more about the different types of mutual funds and associated features in existence today, you can take a look at great resource located at the SEC web site (SEC Spotlight on Mutual Funds):

sec.gov/spotlight/mutualfunds.htm


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