The Rise of Mutual Funds: An Insider's View

Front Cover
Oxford University Press, Oct 27, 2008 - Business & Economics - 320 pages
In 1940 few Americans had heard of mutual funds. Today U.S. mutual funds are the largest financial industry in the world, with over 88 million shareholders and over $11 trillion in assets. The Rise of Mutual Funds describes the developments that have produced mutual funds' long history of success. Among these developments are: * formation of the first mutual funds in the roaring 20s * how the 1929 stock market crash, a disaster for most financial institutions, spurred the growth of mutual funds * establishment in 1934, over FDR's objection, of the United States Securities and Exchange Commission, the federal agency that regulates mutual funds * enactment of the Revenue Act of 1936, the tax law that saved mutual funds from extinction * 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 U.S. financial system *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 * 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. This is the first book that pulls together the many strands of mutual funds' unique history, written by an expert who draws on forty years of personal experience in the fund industry.
 

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Contents

Introduction
1
1 Beginning the Foundation
7
The Investment Company Act
31
3 Early Development
55
Money Market Funds
77
5 Other Responses to the Bear Market
95
6 The Revolution in Retirement Plans
111
7 Reentry of Securities Firms and Banks
133
9 Modernizing SEC Regulation
159
10 Updating Other Regulation
195
11 The Trading Scandals
217
12 Work of a Trade Association
243
13 Looking Back and Ahead
253
Notes
261
Bibliography
287
Index
298

Calls for New Types of Regulation
143

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About the author (2008)

Matthew P. Fink was employed by the Investment Company Institute, the national association of the mutual fund industry, from 1971 to 2004, and served as its President from 1991 to 2004. He is the author of articles on mutual fund history and regularly lectures on that history. He is an honors graduate of Brown University and Harvard Law School and attended the London School of Economics.

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