Growth of Mutual Funds has been gradual and it took really long years to evolve the modern day mutual funds. Mutual Funds emerged for the first time in Netherlands in the 18th century. Then it got introduced to Switzerland, then Scotland and then to United States in the 19th century.
The very idea of mutual funds came from the urge to deliver a form of
Diversified Investment Solution. Over the years the idea developed and people received more and more choices of
Diversified Investment Portfolio through the mutual funds.
When in 1924,
Massachusetts Investors Trust first introduced mutual funds in U.S, they found it difficult to gain the trust of the investors. It was very natural that the people took time to adapt to a new investment idea. There emerged some confusions regarding the Taxation of Investment Income from mutual funds as there was no Regulation or legislation.
Laws started to came in existence from 1940s. The the result was not immediate. The Mutual Fund Concept achieved warm reception only in the middle of 1950s. By the end of fifties and in first half of 1960s mutual fund investment triggered up tremendously.
Monetary Funds benefited a lot from the mutual funds. Earlier investors was used to invest directly in the stock market and many times suffered from loss due to wrong Speculation. But, with the mutual funds which were handled by efficient Fund Managers, Investment Risks was lowered by a great extent. The diversified investment structure of mutual funds also diversified risk and this contributed tremendously in the Growth of Mutual Funds.
Over the years not only the new types of mutual funds emerged, the way, in which mutual funds were sold also changed. But, the
Growth of Mutual Funds has not stopped. It is continuing to evolve to a better future, where investors will get newer opportunities.