History of Mutual fund in Timeline

A mutual fund is an investment vehicle that pools money from numerous investors to invest in a diversified portfolio of securities. These funds are common in the US, Canada, and India, with similar structures like SICAVs in Europe and OEICs in the UK. The pooled funds are managed by professional money managers who allocate assets based on the fund's stated investment objective, which could range from aggressive growth to conservative income. Investors purchase shares of the mutual fund, gaining proportional ownership of the fund's holdings and benefit from diversification and professional management.

March 21, 1924: Establishment of Massachusetts Investors Trust

On March 21, 1924, the Massachusetts Investors Trust, the first open-end mutual fund with redeemable shares, was established. The fund is still in existence today and is managed by MFS Investment Management.

1929: Wall Street Crash leads to regulation

Following the Wall Street Crash of 1929, the United States Congress passed a series of acts regulating the securities markets and mutual funds in particular.

1929: Closed-end funds outnumber mutual funds

In 1929, there were nearly six times as many closed-end funds as mutual funds in the U.S.

1936: Mutual funds gaining popularity

In 1936, the U.S. mutual fund industry was nearly half as large as closed-end investment trusts.

1947: Mutual funds surpass closed-end funds

By 1947, mutual funds had grown to twice as large as closed-end funds.

1950: U.S. Mutual Funds value

In 1950, mutual funds in the U.S. totaled $2 billion in value.

1959: Significant growth of mutual funds

By 1959, mutual funds had grown to ten times as large as closed-end funds.

1960: U.S. Mutual Funds value

In 1960, mutual funds in the U.S. totaled about $17 billion in value.

1973: First retail index funds appear

In 1973, the first retail index funds appeared, aiming to capture average market returns. Rex Sinquefield offered the first S&P 500 index fund to the general public starting in 1973. John "Mac" McQuown also began an index fund in 1973, though it was part of a large pension fund managed by Wells Fargo and not open to the general public. Batterymarch Financial also offered index funds beginning in 1973.

1976: Vanguard's First Index Investment Trust

In 1976, John Bogle formed the First Index Investment Trust, by The Vanguard Group; it is now called the "Vanguard 500 Index Fund" and is one of the largest mutual funds.

August 1995: Formation of AMFI

In August 1995, the Association of Mutual Funds in India (AMFI) was formed as a trade association of all fund houses.

1996: SEBI Regulations for Mutual Funds

In 1996, mutual funds in India are regulated by the Securities and Exchange Board of India (SEBI) under the SEBI (Mutual Funds) regulations.

2003: Mutual fund scandal

In 2003, the mutual fund scandal involved unequal treatment of fund shareholders. Some fund management companies allowed favored investors to engage in prohibited late trading or market timing, leading to an increase in regulation.

2007: Study on German mutual funds

In 2007, a study about German mutual funds by Johannes Gomolka and Ralf Jasny found statistical evidence of illegal time zone arbitrage in trading of German mutual funds.

2009: UCITS Directive established in the EU

In 2009, the European Union established a mutual recognition regime allowing funds regulated in one country to be sold in all other countries in the European Union, if they comply with certain requirements via the Undertakings for Collective Investment in Transferable Securities Directive 2009 (UCITS).

March 2017: "Mutual Funds Sahi hai" campaign launch

In March 2017, AMFI undertook the "Mutual Funds Sahi hai" campaign for promoting investor awareness on mutual funds in India.

2019: Household financial assets in mutual funds

At the end of 2019, 23% of household financial assets were invested in mutual funds. Mutual funds accounted for approximately 50% of the assets in individual retirement accounts, 401(k)s and other similar retirement plans.

2019: Open-end mutual funds in the U.S.

In the United States at the end of 2019, there were 7,945 open-end mutual funds with combined assets of $21.3 trillion, accounting for 83% of the U.S. industry.