From a development perspective, both investment funds and trusts originated in the United Kingdom and became popular in the United States.
In the 11th century, a kind of "usufruct" appeared in British legal circles, that is, according to the agreement between the parties, one party transfers the property to the other party for management. The "Usufruct Law" established the dual usufruct established through this law Rights, which form the basis of modern trust theory, were gradually called trusts by later generations, and developed into an extremely important system in British and American law, playing an important role in economic life.
The "Overseas and Colonial Government Trust" established by the British in 1868 was the world's first formal investment fund. In April 1921, the United States established its first domestic investment fund, the American International Securities Trust Fund. In the following decades, investment funds became the fastest-growing investment tool in the United States. At the same time, with its many advantages such as professional management and diversified investment, it has been favored by investors from various countries and has become an important channel for international capital flows. It has also become an effective form for developing countries and regions to absorb foreign investment.
Judging from the definitions and characteristics of the two, the extension of trusts is larger than that of investment funds. To a certain extent, investment funds belong to the category of trusts, but they have their own characteristics.
Trust is an act in which the trustee transfers his own property to the trustee for a specific purpose based on trust, and the trustee manages or disposes of it in his own name for the benefit of the beneficiary. It can be applied to In civil matters, it can also be applied to commercial matters. Investment funds are mainly used in business.
In the early stages of development, investment funds took the form of a contract and operated through the conclusion of a trust contract. They were essentially a form of trust and were generally called investment trusts or trust funds in name. To this day, many countries and regions still include the word trust in the title of investment funds. In 1879, the United Kingdom made a breakthrough in contractual funds and created corporate funds based on the provisions of the "Limited Company Act". Investment funds in the United States, also known as mutual funds, are basically corporate funds. The holders of such corporate funds are investors in the fund and shareholders of the corporate fund. The shareholders' meeting elects the board of directors, who is responsible for selecting fund managers and fund custodians. It is not difficult to see that investors in corporate investment funds have become shareholders of the fund company. GF Jufeng is no longer completely the trustee under the concept of trust, and the board of directors of the fund company has functions similar to the trustee in a trust. It can be said that corporate funds make use of trust principles and corporate structure forms, and are a special kind of company.
From the perspective of investment operations, both make use of the financial management concept of letting others manage property. Depending on whether the trustee is profitable or not, trusts can be divided into civil trusts and commercial trusts. In a civil trust, the requirements for the trustee are lower, and it is enough to obtain the trust of the trustor. Commercial trusts and investment funds have strict requirements and restrictions on those who manage trust properties or fund assets, and ordinary people are not allowed to serve.
From the perspective of national legislation, most countries have formulated relevant laws and regulations for trusts and investment funds.
Trust law in the common law system is mainly unwritten, but some bills and interpretations have also been formulated and written. Such as the British Trustee Act of 1893, the Official Trustee Act of 1896, the Public Trustee Act of 1906, the Trustee Management Regulations of 1925, and the Management of Charitable Trusts Regulations of 1960 ", "Trust Investment Regulations" in 1961, and "New Interpretation of Trusts" published by American Legal Research in 1935. Some countries in the civil law system have never recognized the trust system. However, with the successful application of the trust system in Japan, they gradually recognized the trust system and formulated a series of written laws and regulations. Such as Japan's 1921 "Trust Law", South Korea's 1961 "Trust Law", my country's Taiwan Province's "Trust Law", "Trust Investment Company Management Regulations", etc.
Investment fund legislation is mainly divided into three categories. The first is the legislation on corporate investment funds, mainly in the United States. For example, in 1940, the United States enacted the Federal Investment Company Act and the Investment Advisers Act. The second is the legislation on contractual investment funds represented by Japan. For example, in 1951, Japan enacted the Securities Investment Trust Law. The third is hybrid legislation represented by my country's Hong Kong Special Administrative Region. For example, in 1978, Hong Kong formulated the "Code on Unit Trusts and Mutual Funds."