Many people think of Boston as the birthplace of democracy in our country.
They may not realize it is also the birthplace of the democratization of investing. By pooling investments, the fund made shares in American companies accessible to a broader market. But the MIT's true innovation was allowing investors to redeem shares upon request, at market value of the underlying stocks. The investment pools common at the time traded as individual shares, just as today's closed-end funds do, which meant that sellers might be forced to trade shares at a discount to the value of the stocks in the pool. Some 77 million Americans own mutual funds, says the Investment Company Institute, the industry's trade group.