Newspaper article St Louis Post-Dispatch (MO)

Now It's Time to Get Serious with the Gifts

Newspaper article St Louis Post-Dispatch (MO)

Now It's Time to Get Serious with the Gifts

Article excerpt

Season's greetings: You've given your children and grandchildren the toys and fun they want for the holidays. Now, as we get ready to ring in another year, it's time to get their financial futures in shape.

Ideally, basic saving and investing for youngsters' educations should begin when they're infants. There's also a potential to save and invest in a way that can help kids learn how money actually works. Countless vehicles can be used to get the point across, such as the low-balance kids' saver accounts offered by many banks.

Some mutual funds are specifically aimed at getting kids interested in more serious investing. Such choices should be considered long-term vehicles to be built up gradually, not short-term plays on a volatile bull market.

"We commissioned a study on kids' interest in money and investing, and found they were interested but had a low understanding," said David Brady, co-portfolio manager of SteinRoe Young Investor Fund. It's up 42.67 percent in total return the past 12 months. "We developed a mutual fund to stimulate interest in investing among young kids, educate both children and parents on the subject, and provide a vehicle for long-term growth."

Stock in well-known companies whose products or services are familiar to youngsters, such as Coca-Cola Co., Walt Disney Co., Procter & Gamble and H.J. Heinz, make up the fund's core holdings. The rapidly growing Noodle Kidoodle educational toy retailing chain is an aggressive holding, along with Pet- Smart, the largest owner and operator of pet care stores, and Broderbund, the educational software firm.

Bright, attractive educational materials come with the "no-load" (no initial sales charge) fund. Initial investment requirement is $2,500, or $100 if you open it under the Uniform Gifts to Minors Act and agree to put in $50 each month until the account reaches $1,000.

Some other funds also are geared for children.

In mid-November, AIG Capital Management Corp. launched AIG Children's World Fund-2005, which is designed to provide a guaranteed return of a shareholder's original investment at maturity, on Nov. 15, 2005.

"We wanted a fund that would provide for a child's financial future, educate kids about financial responsibility and make sure they won't lose any money," said Robert Ash, chairman of AIG. …

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