The relevance of the research problem inspired with the fact nowadays there is a need for theoretical generalization based on international experience the essence of the collective investment system and the rationale for prioritizing the mutual funds development as the most attractive form of collective investment. The goal of the article lies in theoretical provisions development and practical recommendations for mutual Funds modernization and development as a form of collective investment. A leading approach to study this problem is a classical approach that can identify the characteristics of different forms in collective investment, mutual Funds benefits as a promising form of collective investments organization. Main results of the research are to formulate definitions of collective investment, collective investment that allows you to build a model of the collective investments system in Russia, reflecting the relationship and interdependence of an elements set and having relative isolation from other segments of the financial market. Also there were developed priorities for the mutual funds development as a promising form of collective investment in the Russian Federation. The article can be useful, that developed in that position develop theory for collective investment in management system private savings (personal finance). Suggested ways of improving the mutual funds functioning can be used in the practice of collective investments for providing safety of investors' financial resources, increase control and mitigate risk.