Newspaper article The Christian Science Monitor

$5,000 Minimum? What If I Only Have $500? Some Mutual-Fund Families Cater to Investors Just Starting Out

Newspaper article The Christian Science Monitor

$5,000 Minimum? What If I Only Have $500? Some Mutual-Fund Families Cater to Investors Just Starting Out

Article excerpt

Mutual-fund companies like to advertise themselves as investment products for the masses.

Unfortunately, Mr. and Mrs. Small Saver must now kick in $1,000 or more just to get in the door at most funds. One highly rated stock fund, Clipper, sets you back $5,000 at the front gate.

The fund industry, looking for greater efficiency, has waved goodbye to an era when the minimum ticket cost less than $1,000. And some funds now levy special charges if your account dips below a specified minimum. In extreme cases, it might even be closed. Fortunately, not all funds and fund families have turned their backs on small savers. Some funds still have low minimums, and others offer an old-fashioned installment plan for new investors: * Low-cost fund families. A number of funds and fund families have minimums investments of $500 or less. And they can be first-rate funds. The best known low-cost family is Franklin-Templeton (800-632-2180.) Most Franklin-Templeton funds require a minimum investment of $100, with subsequent investments as low as $25. Considering that the group holds some of the hottest, and most highly regarded, funds in the industry, particularly Templeton's international funds, the low minimum represents a genuine bargain. Note, however, that Templeton charges loads, or up-front sales commissions, that consume about $6 of every $100 you put in. The Muhlenkamp Fund (800-860-3863) opens the door for a tad more - $200. Subsequent investments must be $100 or more. Muhlenkamp was a hidden treasure for years, known mainly to fund aficionados. In recent months, Muhlenkamp's success has won more positive press. It's up 31.4 percent this year through Dec. 3, and it tends not to drop as sharply as other funds in declining markets. With $250 you can get into the Strong Total Return Fund or the Strong Asset Allocation Fund (800-368-1030. …

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