The History of Mutual Funds

Mutual funds are a form of collective investments made (together), and investments are managed by an investment management firm. This firm is an investment company that manages its customers investment.

When investing in mutual funds, investors can not control their money directly to determine where the money should be invested. Investors fully devolved control to the other, they are Investment Manager. Investment managers as a manufacturer of mutual funds design a wide range of products with different specifications as well as composition. Product specifications, the composition of investment, as well as anything else about the mutual fund products can be seen in "manual book" called the Mutual Fund Prospectus.

The History of Mutual Funds
The first mutual fund in the history called the Massachusetts Investors Trust, issued on March 21, 1924. In just over a year has had as many as 200 investors of mutual funds with total assets worth US $ 392,000.

In 1929 when the stock market falls, the mutual fund industry growth is slowing. Responding to the collapse then US Congress issued a stock exchange Securities Act of 1933 and the Securities Exchange Act of 1934.

Under these regulations the fund must be registered with the Securities and Exchange Commission (SEC), a commission in the United States who handle securities trading and capital markets. Besides that, the issuer is obliged must be provide mutual fund prospectus contains information about disclosure of mutual fund, also include securities which the object of management, information regarding the issuing of investment managers of mutual funds.

SEC is also involved in the design of the Investment Company Act of 1940 which to be the reference of the provisions that must be met for any registration of mutual funds till today.

With the restoration of market confidence on the stock market, mutual funds began to grow and develop. By the end of 1960 has been estimated there are about 270 mutual funds with assets under management amounting to 48 billion US Dollar.

Index mutual funds were first introduced in 1976 by John Bogle with the name First Index Investment Trust, which is now called the Vanguard 500 Index Fund. This mutual fund is the largest mutual fund with assets under management reaching 100 billion US Dollar.

One of the largest contributors of mutual fund growth in America is by the provision of Individual Retirement Account (IRA), which adds provisions to the Internal Revenue Code in Amercica that allows individuals (including those who already have a company pension plan) for the setting aside of 4,000 U.S. $ year.