Thursday , 25 July 2024

Mutual Funds: Their History, Types, Fees & Benefits

Today’s infographic comes to us from StocksToTrade and it showcases the basics around mutual funds, including their history, typical structures, why people invest in them, and how fees usually break down.

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The birth of the mutual fund goes all the way back to 1774, when Dutch merchant Adriaan van Ketwich first pooled the resources from a number of small investors to form a trust called “Eendragt Maakt Magt” (“unity creates strength”), which lasted for 50 years and set the stage for what is now a $40.4 trillion industry globally.

Unlike the very first mutual fund (closed-end) most common funds today (86%) are open-ended. These funds buy back or sell their shares at the end of each day based on the net asset value (NAV) of securities, and these open-end funds accounted for $16.3 trillion of assets under management (AUM) in the U.S. at the end of 2016. Closed-end funds and unit investment trusts (UITs) make up the rest of the mutual fund market, and of course the fast-growing ETF sector makes up a growing piece of the wider U.S. fund industry as well.

Want to learn more on different types of assets and investments? See infographics on hedge funds, ETFs, dividend stocks, or even microcap stocks

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