BONSERNEWS.com – The history of mutual fund investing can be traced back to the 19th century, although the concept only developed rapidly in the 20th century.
The following is an overview of the history of mutual fund investment:
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In 1822, in the Netherlands, an entity called “Maatschappij tot Nut van ‘t Algemeen” was founded which can be considered the ancestor of modern mutual funds. This entity collects money from many investors to invest in various assets, such as bonds and stocks, with the aim of sharing the profits with the investors. This marked the beginning of the concept of collective fund management.
Developments in the United States:
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In the early 20th century, in the United States, collective investment funds began to develop with the founding of the Massachusetts Investors Trust in 1924. This trust allowed individual investors to invest in a portfolio of joint securities and own shares in the trust. This became the foundation for the modern mutual fund industry in the United States.
Growth in Europe:
In Europe, the development of mutual funds began in the mid-20th century. In England, the first collective investment fund was established in 1931 under the name Foreign & Colonial Government Trust. In Sweden, a type of open investment fund was established in 1950, called “fondkommission”.
Regulation and Further Development:
In 1940, in the United States, the Investment Company Act which involved the supervision and regulation of collective investment funds was introduced. This provides protection for investors and increases confidence in the mutual fund industry. In several other countries, similar regulations are also enacted to protect the interests of investors.
Globalization and Innovation:
Along with globalization and technological advances, the mutual fund industry continues to develop and innovate. The approaches and types of mutual funds also vary, including stock mutual funds, bond mutual funds, money market mutual funds, and index mutual funds. Advances in technology also allow investors to access mutual funds online and invest easily through digital platforms.