The first mutual fund was started by Dutch merchant Adriaan Van Ketwich in the year 1774 . Van Ketwich called his fund as Eendragt Maakt Magt which means 'unity creates strength'. This managed to spread out the risk of losses and similarly the gains would be distributed among the investors in the proportion of their investment.

Van Ketwich's fund was a closed-end fund which remained open until all the 2000 shares were sold out amongst the public. After all the shares were sold out in the initial offer, the fund was closed for general public and they could acquire or accumulate it only from an existing shareholder in the open market.

The first modern-day mutual fund, Massachusetts Investors Trust, was started in 1924. The mutual fund attracted investors from the beginning and eventually went public in 1928.

The story of mutual fund industry in India begins from 1963. Unit Trust India (UTI), which was an initiative of the Government of India and the Reserve Bank of India (RBI), was set set up with the intention of encourating saving and investment among Indians who could take benefit of a growing economy. In 1978, Industrial Development Bank of India (IDBI) took over the administrative and regulatory control of UTI from RBI. Unit Scheme 1964 (US 64) was the first scheme launched by UTI, this scheme became very popular among the pensioners. 

Between 1987 and 1993 many public sector players like the State Bank of India, Punjab National Bank, Indian Bank, Canara Bank, Bank of Baroda, Life Insurance Corporation of India and General Insurance Corporation of India entered the arena.

Private Sector players such as Birla Sun Life, HDFC Bank, ICICI Bank, Kotak Mahindra Bank and couple of others entered the scene. They were largly benefited due to a scam that engulfed UTI and also due to liberalization.

As of June 2018, the Average Asset Under Management was Rs. 23,40,377 crore. Indian mutual fund industry has seen a growth of more than 100% in terms of Asset under Management in just 4 years.