From trusteeship to fund family: Organizational form transformation and the integration of mutual funds into the United States field of finance, 1924--1991

This dissertation provides an institutional analysis of the rise of mutual funds in the U.S. Drawing on the literature of economic sociology, I argue that to understand how mutual funds have increasingly become part of the way Americans save for the future, it is useful to explore changes in capital formation processes and how the overall U.S. field of finance was recomposed over the course of the 20th century. I argue that before mutual funds became a taken for granted mechanism that shifts savings towards investment, they had to be integrated into the core of the field of finance. In the process, however, the mutual fund investment adviser organizational form was fundamentally transformed.; When mutual funds emerged in the 1920's, they were created primarily by Boston elites who sought to extend the fiduciary practices of trusteeship to broader publics. Trustee-based investment advisers typically offered one or two funds that were managed by a committee of senior officers whose investment styles were mostly conservative. As mutual funds shifted from the periphery to the core of the U.S. field of finance, the dominant trustee-based form was transformed into the mutual fund family form where a panoply of funds with different risk orientations and investment styles are offered under a common investment adviser brand name and ownership structure. With the fund family form, professional money managers, not a committee of senior officers, are in control of portfolio management decisions.; I use a mixture of historical, qualitative and quantitative methods to make arguments and present evidence having to do with this transformation from the trustee-based to fund family organizational form. I claim that it was the construction of money management practices as a set of "professional" activities and the development of portfolio management as a core competence of mutual fund investment advisers that were the crucial elements that led to the integration of mutual funds into the core of the U.S. field of finance and the concomitant transformation of the mutual fund investment adviser organizational form. Event history analysis techniques are used to test core hypotheses and provide suggestive evidence in support of my claims.