According to the U.S. Securities and Exchange Commission, over the past decade American investors have increasingly chosen mutual funds to save for retirement and meet their other financial goals. Yet, the process of selecting mutual funds can be difficult if not overwhelming. Finding the products best suited to your financial objectives requires a comprehensive picture of the mutual funds industry, and HB Capital Funds recommends hiring a knowledgeable professional investment advisor as a wise first step.Below, HB Capital Funds offers some background information about mutual funds and the myriad choices consumers face.History of Mutual FundsThe initial investment trust — now called mutual fund — was formed in the early 1800s in the Netherlands. The New York Stock Trust of 1889 was the first mutual fund in the U.S. Since Boston was the economic center of the nation until the turn of the century, the majority of funds started there, including Fidelity, Pioneer and Putnum.In the U.S., mutual funds first gained popularity in the 1920s.* After the stock market crash of 1929, however, there were just 10 mutual funds in the nation. Following the ’29 crash, Congress passed a series of acts regulating the securities markets in general and mutual funds in particular.Confidence in the stock market was renewed in the 1950s and the mutual fund industry began to grow again. By 1970 there were approximately 360 funds, with $48 billion in assets. In the ’70s, no-load funds were invented and the largest today, Vanguard Funds, was founded in 1977.Fund industry growth continued into the 1980s and 1990s as a result of the bull market for both stocks and bonds, new product introductions and new distribution channels, such as retirement plans. Today, as noted above, mutual funds are the preferred investment option in certain types of fast-growing retirement plans, specifically in 401(k) and individual retirement accounts (IRAs).In 2008, total mutual fund assets fell due to the credit crisis, yet by the close of 2009 there were more than 7,500 mutual funds in the U.S. with combined assets of $11.121 trillion. The Investment Company Institute (ICI), a national trade association of investment companies responsible for tracking this data, also reported that at the end of 2009 worldwide mutual fund assets were $22.964 trillion.*A fund comprised of both stocks and bonds, the Wellington Fund, was created in 1928 and is still part of Vanguard today.