Evolution and Impact of Mutual Funds

This chapter explores the evolution of mutual funds, from the establishment of key practices like having accountants, boards of directors, and custodians to the introduction of index funds by industry heroes like Jack Bogle. It discusses the importance of diversification, transparency, and the impact of scandals on the industry, as well as the rise of exchange-traded funds (ETFs) in the 1990s. The chapter also delves into the pros and cons of open-end mutual funds versus ETFs, while highlighting the trend of fund companies adopting ETF share classes and the challenges faced by mutual fund firms amidst fee compression.