Date of Award


Degree Name

Master of Business Administration


Business Administration

Access Setting

Masters Thesis-Open Access



In recent years the policies of many of our financial institutions have changed to meet the public demands and the degree of competition. It hasn't been too many years ago when most bankers felt that an automobile loan should be repaid in 24 months rather than the 36 month period which is now common. Some lenders today are even offering a 42 month repayment period. It wasn't too long ago when most banks were paying 2 1/2% on their savings accounts while the standard rate now is 3%, with most banks offering an even higher rate of 4% for funds left on deposit for a full year. The banks previously limited the maturities of the municipal bonds they purchased to ten years; however, within the past three years, partly in an attempt to offset rising costs and higher interest rates on savings, they have changed their policy so that they now buy bonds in the 15 and even 20 year range. Greater emphasis has also been placed on mortgages, with more liberal terms available. A 20-year loan was the maximum but now some banks have terms up to 25 years, and other lending institutions up to 30 years.

It is sometimes difficult for the layman or a young person entering the field of finance to understand why, within a relatively short period of time, the views of the industry leaders should suddenly change to such a liberal attitude. The financial industry is heavily regulated and many of the changes have taken place because the regulations governing the actions permit such a change. However, many regulatory changes are brought about as a result of the initiative of the men within the industry. It is with this thought in mind that I have undertaken a study of the subject of collective investments for bank trust departments. As in other areas of the financial world, here too, significant changes have taken place which will have an effect on an increasing proportion of those the trust institutions hope to serve.

There is a wealth of information available on the subject of collective investments for bank trust departments, but it pertains to specialized areas of this method of investment. It is not intended here to develop a manual on how collective investment funds are established and operated, but rather the purpose is to draw attention to the important phases of development, identify the tools available for trust investment, and project its place in the industry.