Mutual Fund Milestones
November 29, 2010
1774-Adriaan van Ketwih creates investment trust for investors limited capital in Netherlands called Eendragt Maakt Magt ("unity creates strength.")
1822-King William I of the Netherlands launches closed-end investment companies.
1893-Boston Personal Property Trust becomes first closed-end fund established in the United States.
1907-Alexander Fund in Philadelphia features semi-annual issues and allowed investors to make withdrawals on demand.
1924-Massachusetts Investors' Trust in Boston, Mass., creates first mutual fund. This led to the mutual fund firm known as MFS Investment Management. MFS continues as No. 1 mutual fund company for the next 29 years, through 1953.
1928-Scudder, Stevens and Clark launch the first no-load fund.
1928-Wellington Fund includes stocks and bonds.
1929-19 open-ended mutual funds compete with nearly 700 closed-end funds when stock market crashes.
1933-Mutual funds required to register with the SEC and to provide disclosure in the form of a prospectus.
1940-The Investment Company Act of 1940 requires more disclosures and seeks to minimize conflicts of interest.
1954-The number of mutual funds tops the 1929 peak. Roughly 50 new ones born each year.
Investors Diversified Services becomes the No. 1 fund company in the nation and retains this position for the next 24 years, through 1978. Through mergers, IDS becomes part of American Express, Ameriprise Funds and finally Columbia Funds.
1959-$1.3 billion flows into equity-based mutual funds.
1964-More than 100 funds open, annually.
1969-Bear market cools interest in mutual funds
1971-William Fouse and John McQuown of Wells Fargo Bank establish the first index fund, a concept that John Bogle would use as a foundation on which to build The Vanguard Group, renowned for low-cost index funds.
1974-Creation of the first index fund at Vanguard.
1975-Acceptance of the no-load fund surges.
1979-Fidelity becomes the No. 1 fund company in the nation, a position it holds for the next 29 years through 2008.
1983-$11.1 billion flows into equity mutual funds.
1985-Fund managers Max Heine, Michael Price and Peter Lynch become household names.
2000-The dot-com bubble bursts on Friday, March 10, 2000, with the technology-heavy Nasdaq peaking at 5,048.62, more than double its value just a year before.
2003-New York Attorney General Eliot Spitzer uncovers rampant late-trading and market timing of mutual funds by hedge funds, prompting the SEC and state regulators to charge 14 firms and collect more than $6 billion in fines and penalties.
2004-The Securities and Exchange Commission, NASD and the New York Stock Exchange bring enforcement proceedings against Edward D. Jones & Co. for failing to adequately disclose revenue-sharing payments that it received from a select group of mutual fund families'
2008-Vanguard becomes the No. 1 mutual fund company in the nation.
2008-Credit crisis erupts and money market fund The Reserve Fund breaks the buck.
2010-More than 10,000 mutual funds compete.
SOURCES: A Brief History of the Mutual Fund (James E. McWhinney); Investment Company Institute