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History & Overview

In one form or another, mutual fund companies have existed in the United States since 1924 with the advent of the Massachusetts Investors Trust managed by Massachusetts Financial Services and later the formation of State Street Investment Corporation (mutual funds as investment vehicles predate these companies). In many ways, the general idea has remained the same ever since – offer small investors, or savers, access to diversified portfolios as a low-risk means of growing financial wealth. Like other financial services vendors, these investment intermediaries match savers with borrowers and provide both parties with risk sharing, liquidity, and reduced information costs. By an Investment Company Institute estimate, mutual funds worldwide accounted for close to $27 trillion USD in investment dollars as of the end of 2012. The industry is significant, needless to say, and these investment vehicles are a lazy strategy favorite. Here we offer a primer on mutual fund companies and funds, complete with a summary of some key judgement metrics. Continue reading