Mutual Funds

Mutual Funds

Introduction
Mutual Funds are investments pools that allow those who don’t have the ability to manage 
their investments directly the opportunity to participate in global and local markets. 
This booklet helps in knowing these funds, their types and goals. It also explains their 
management techniques and methods to measure their performance.

A Historic View on Mutual 
Funds: 
The idea behind mutual funds goes back to the 
first quarter of the nineteenth century in Europe. 
It started in the Netherlands to be exact in 1822 
then England in 1870. It went through a lot of 
developments and changes that occurred on the 
economical world until it reached the level it is 
now. The real beginning of mutual funds in its cur-

rent concepts was in 1924 in the United States of 
America. The first fund was established in Boston 
by Harvard University professors and was named 
“ Massachusetts Investment Trust”. After that, 
it continued to expand in the United States and 
abroad especially after World War II. By 1966, it 
reached about 550 mutual funds with total net as-

sets worth $ 50 billion US Dollars

Mutual funds continued its expansion until 
it reached 56,000 mutual funds around the 
world in 2005 where its total net assets 

exceeded $16.4 trillion US Dollars.
On the Arabian level, the Kingdom of Saudi Ara-

bia was the first to enter this field. The National 
Commercial Bank (AlAhli) founded the first mu-

tual fund under the name of “AlAhli Short Term 
Dollar Fund” in December 1979. The rules gov-

erning mutual funds in Saudi Arabia were issued 
14 years after that date, i.e. by the beginning of 
1993. As a result to this successful experiment, 
Saudi banks continued in issuing a lot of different 
mutual funds. 
A list of the available mutual funds can be found 
on the website of the Saudi Stock Exchange 
(Tadawul) www.tadawul.com.sa
As for the other Arabian countries, they entered 
the same experience with varying degrees of suc-

cess and popularity. Most of these experiments 
were characterized by the issuance of mutual 

Mutual Funds