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Rekenthaler Report

A Picture History of the Fund Industry

Fifteen years in four colored lines.


The Thousand Words
The chart below illustrates the change in asset size of four prominent mutual funds over the past 15 years. I've removed the funds' names, replacing them with a short description, such as Star Stock Manager or Index Stock Fund, because the point of this column is not the rise and fall of individual funds, but instead the varying fortunes of fund types. The point: Today's fund investors think very differently than did those of the 1990s.

At the beginning of our tale, in 1998, Star Stock Manager Fund reigned supreme, boasting more assets than the other three funds combined. The mutual fund industry had almost disappeared by the mid-70s, shredded by the 1973-74 stock bear market and plummeting bond prices. The industry was resuscitated first by growth in money market funds, late in the 1970s, then by government-bond funds in the mid-80s. Its third and largest boom, however, was the U.S. stock fund, typically run by adventuresome solo managers.

John Rekenthaler does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.