The first investment funds appeared in the 18th century aiming to reduce the risk for individual investors through the distribution of investment in different securities. In Croatia, they started to develop in 1995 with the emergence of privatization investment funds. Today, there is a large number of investment funds in Croatia, of different types and investment strategies, which is a consequence of the development of the capital market and the adoption of laws and regulations establishing the management of funds. A fund can be established by an investment fund management company that holds the approval of the national supervisory body (HANFA). Investment funds can basically be divided to open-end investment funds (UCITS) and alternative investment funds (AIF). According to the different types of investment funds, they differ significantly in terms of investment structure. Today, the Croatian market, as well as the markets of most other transitional but also developed countries, are dominated by open-end investment funds, both by number and by the value of total assets they manage.