Start Small

March 30, 2007

You want to start building a mutual fund portfolio, but you don't have the $3,000 or so you need to meet most funds' minimum initial investment requirements. John Waggoner in USA today finds two no-load funds with minimum investments of just $500, one of which, Homestead Value, is a MAXadvisor Favorite:

Excelsior Mid-Cap Value and Restructuring (UMVEX) ($500 min/$250 IRA)

Homestead Value (HOVLX) ($500 min/$250 IRA)

He also reminds us that T.Rowe Price offers entrée to many of their funds for as little as $50 if investors agree to participate in an automatic investment plan, wherein a certain amount is deducted each month from contributor's bank account and invested in the fund.

Buffalo, Artisan, and Weitz (among others) also accept reduced initial investments from automatic investment plan participants.


Note: We're frankly not sure why Waggoner included Hennessy Cornerstone Growth (HFCGX) ($2500 min/$1000 IRA) and USAA Capital Growth (USCGX) ($3000 min/$1000 IRA) in an article about low minimum funds as these fund's minimums are certainly no lower than average. If you can figure it out, let us know by posting a comment.

See also:

Where to Start
Ask MAX: Can I build a fund portfolio with just $17,000?
Ask MAX: Investing $20 a month?
Ask MAX: Where do I start?