Discovering Low Minimum Mutual Funds

Low Minimum Mutual Funds

Low minimum mutual funds can make all the difference in when investors actually get to start putting money toward their futures. Anything from poor performance to exorbitant fees or an inexperienced manager can cause problems once a person has started their mutual fund, but many high minimum investments keep people from even beginning their funds in the first place. The following article will take a look at low minimum mutual funds for prospective shareholders to consider buying into.

Finding Low Minimum Mutual Funds

Smartmoney.com has a fund screener that filters out any fund with a minimum investment of higher than $5000. But that is not everyone's idea of a low minimum. Fortunately, there are investments you can begin with much less than several thousand dollars. It's perfectly reasonable to not have a lot of cash lying around to begin your initial investment. Many people are in the middle of supporting a family, putting children through school, or reserving money for other things, like an emergency fund. Lower minimums attract novice investors to funds because of their accessibility.

The Downside Of Low Minimums

A smaller minimum isn't always a good thing though. Said senior analyst Jeff Tjornehoj, "A lower minimum often means more shareholders." More shareholders mean that more records will be kept, which raises the potential for higher ongoing expenses. This means that funds with higher minimums may actually have less expenses. Companies like Vanguard use high minimums on purpose to keep their most profitable funds from seeing too many new investors. And there are situations in which a higher minimum can be outright waived for you if you become part of an agreement saying you'll make contributions through an account regularly. Advisors can also help you sidestep a high minimum investment.

Finding Low Minimum Funds

But if you are interested in low minimum funds, there are some that stand out more than others. Funds under the Amana family and New Covenant Balanced Income are funds that are religiously themed. A personal favorite of many is Hodges. It is run by Don Hodges, who currently has more than 50 years of financial experience. Hodges describes his strategy for picking stocks as "eclectic," and while his strategy might not seem focused enough for some, the fund returned an average of 20.5% annually from 2002 to 2007. Pax World Balanced's mixed asset fund is also listed at $250, and CG Capital Markets has large and small cap value funds that require only $100 to get started.

Connor Swinney is the owner of the What Are Mutual Funds website. He created the website to be used as a resource for people who are looking for more information on Balanced And Income Mutual Funds or that would like to know how they can create a successful investment strategy.

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