Introducing the Mutual Fund
L. Sherman Adams 1924

During the early nineteenth century, wealthy Bostonians became interested in the investment vehicle known as a "trust." At that time, a trust was simply a collection of money set aside by an investor to benefit a specific person or project.

L. Sherman Adams, working at the Boston Stock Exchange, was a daring Boston broker who introduced a new type of trust in which investors could buy and sell shares on demand, rather than tie their money up for a number of years. He called his fund the Massachusetts Investors Trust, our nation's first mutual fund. At first, investors were skeptical, but after the Trust survived the stock market crash of 1929, more mutual funds, at first called "Boston funds," began to crop up supported by Boston's solid State Street Bank.

The success of the Massachusetts Investors Trust stimulated the growth of some of the world's most successful investment companies in Boston like MFS Investment Management (successor to Adams' company), Putnam Investments, and Fidelity Investments.

  The Death of the Banker: The Decline and Fall of the Great Financial Dynasties and the Triumph of the Small Investor
by Ron Chernow, 1997