The mutual fund at 100: is it becoming obsolete?

One hundred years ago last Thursday, Edward Leffler, a former door-to-door salesman of pots and pans, revolutionised financial markets. His invention, the open-ended mutual fund, allowed retail customers to buy into a diversified portfolio of stocks and be confident that they would get a fair value when they wanted their money back.

Leffler's innovation gave lower and middle class people an ownership stake in American capitalism. It also spawned financial titans like Fidelity and Vanguard and thousands of smaller competitors that together employ hundreds of thousands of people.

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