History of Mutual Funds

The first mutual fund was started in the Netherlands in 1774. Then mutual funds spread across Scotland, the U.K and France before entering the U.S. These early mutual funds are called Investment Trusts. The first American mutual fund was New York stock trust, established in 1889. Then most of the mutual funds were started in Boston in the early 1920’s, including the State Street Fund, Massachusetts Investor’s Trust (MFS), Fidelity, Pioneer, and the Putnam Fund.

In 1960s there were hundreds of aggressive mutual funds with high risk were started. In 1970s there started ‘no load funds’ with zero sales commission. There was a tremendous growth in this industry in 1980s and 1990s especially after the World War II.

In India, first mutual fund was started by Unit Trust of India in 1964. Reserve bank of India promoted UTI and continued to regulate it until the relationship had broken up in 1978. UTI launched a ULIP in 1971 and six more schemes between 1981 and 1984. UTI enjoyed monopoly until the public sector funds were allowed in to the industry. The second mutual fund was started by SBI in 1987.

Private sector funds were allowed in 1993, which changed the way of the industry with innovative products with good customer service. From then on a plenty of domestic and foreign fund houses started launching new funds in India.

Reliance Mutual fund tops the list today with Assets Under Management (AUM) more than any other fund house. HDFC is the next biggest fund house followed by ICICI and UTI.

Visit the below AMFI (Association of Mutual Funds in India) website for any mutual fund related information in India.

AMFI Website