The Rise of Mutual Funds: An Insider’s View
Matthew P. Fink
Abstract
In 1940 few Americans had heard of mutual funds. Today, US mutual funds are the largest financial industry in the world, with over 88 million shareholders and over $11 trillion in assets. This book describes the developments that have produced mutual funds' long history of success. Among these are: the formation of the first mutual funds in the 1920s; how the 1929 stock market crash, a disaster for most financial institutions, spurred the growth of mutual funds; the establishment in 1934, over FDR's objection, of the United States Securities and Exchange Commission, the federal agency that reg ... More
In 1940 few Americans had heard of mutual funds. Today, US mutual funds are the largest financial industry in the world, with over 88 million shareholders and over $11 trillion in assets. This book describes the developments that have produced mutual funds' long history of success. Among these are: the formation of the first mutual funds in the 1920s; how the 1929 stock market crash, a disaster for most financial institutions, spurred the growth of mutual funds; the establishment in 1934, over FDR's objection, of the United States Securities and Exchange Commission, the federal agency that regulates mutual funds; and the enactment of the Revenue Act of 1936, the tax law that saved mutual funds from extinction. In addition the book details the passage of the Investment Company Act of 1940, the “constitution” of the mutual fund industry; the creation in 1972 of money market funds, which totally changed the mutual fund industry and the entire US financial system; the enactment of the Employee Retirement Income Security Act of 1974, which created Individual Retirement Accounts; the accidental development of 401(k) plans, which have revolutionized the way Americans save for retirement; and the 2003 trading abuses, the greatest scandal ever in the history of the mutual fund industry. Many events have never been discussed in detail; others have been discussed in works on other subjects.
Keywords:
mutual funds,
1929 stock market crash,
regulation,
Revenue Act,
tax law,
Investment Company Act,
money market funds,
individual retirement accounts
Bibliographic Information
| Print publication date: 2011 |
Print ISBN-13: 9780199753505 |
| Published to Oxford Scholarship Online: January 2012 |
DOI:10.1093/acprof:oso/9780199753505.001.0001 |
