Genesis Of MUTUAL FUNDS

The idea of pooling money for investment purposes was started unofficially in Europe in the nineteenth contury. However, the first officially pooled fund in the US was created in 1893 for the faculty and staff of Harvard University on March 21-1924. Called the Massachusetts investors Trust, the fund grew from $50,000 in assets to $392,000 with around 200 shareholders in just a year. The fundraisers, however,had no idea how popular their investment idea wuld become around the globe.

Today, there are over 10,000 Mutual funds in the US alone, totaling around $7 Trillion, with some 83 million ivdividual investors. However, the stock market crash of 1929 decelerated the growth of mutual funds. in response to the stock market crash, the Congress passed the Securities Act of 1933 and the Securities Exchange Act of 1934. These laws require the a fund be registered with the SEC and provide prospective investors with a prospectus. The U.S. Securities and Exchange Commission helped create th investment Company Act of 1940 which provides the guidelines that all funds must comply with today.

With renewed confidence in the stock market, mutual fuands began to blossom. by the end of the 1960's there were around 270 funds in the US With $48 billion in assets. in 1976 , John C. Bogle Opened the World's first retail index fund called the first index investment trust. It is now called the Vanguard 500 index fund and by 2000 , it had become the largest mutual fuand ever with $100 Billion in aasets.
One of the largest contributors to mutual fund growth was Individual Retirement Account (IRA) Provisions made in 1981 , which allowed individuals (including those already in coroporate pension plans) to contribute $2,000 a year. Mutual funds are now popular in employer-sponsored defined contribution retirement plans around the world.

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