Conference nyoss1::market_investing

    Funds which have low minimums tend to have higher expense ratios.

    Consider two highly-rated no-load funds:

    Financial Industrial Income - $250 min - 1.24 expense ratio
    Vanguard Wellesly Income - $3000 min - 0.40 expense ratio
    

    Is the minimum typically only enforced at entry ?  Are you allowed to
    transfer funds out which result in the fund balance dropping below
    minimum ?  (Of course, if you open an account at minimum, it can drop
    on its own.  How is this handled ?)

    L.

    If you look at a significant number of funds, you will find that there
    is little relationship between the minimum amount required to open an
    account and anything else, such as management fees, load (sales
    charge), 12b-1 (marketing fees), PERFORMANCE, etc.  Remember, the
    emphasis with Mutual Funds is MARKETING.  One very basic rule in
    marketing is that you are constantly searching for ways in which to
    differentiate your product, even if the differentiation is meaningless.
    (Please, no marketing rat-holes. That is not a radical statement.)
    
    Minimum ADDITIONAL investments are a way to control expenses.  If your
    loaded-labor cost of incrementing an account is, say $25 (not a high
    figure), you would like to set a minimum of $250, perhaps. Of course,
    you might put in a option for electronic funds transfer from an account
    of a $50 minimum thereby encouraging automatic, low overhead
    investments.  Most funds will close out your account for you :-) if you
    let it drop significantly below the minimum.
    
    You should not get into Mutual Fund investments with a short term
    perspective.  Look at the track record of ANY fund over a 5 year period
    and you will see cycles.  There really are good, rational, predictable
    reasons for those cycles. In the better funds, the baseline slope of
    the cycles is upward. If you are interested in using a Mutual Fund as a
    part of a serious savings plan, then the numbers support long term (to
    avoid problems with cycling) regular investing (take advantages of the
    mathematics of dollar-cost-averaging.  
    
    After a while, assuming you have many funds to play with, you will be
    able to see how you can move money out of a fund that is starting its
    down cycle and into a fund that is starting its up cycle.  Of course,
    since every sale has a buyer, that means that someone else(s) thinks
    you are wrong - you may be.
    
    Read "One Up on Wall Street", Peter Lynch.
    
    Hope this help, 
    
    Dave
    

    Thanks for the replys...My reason for asking...given a fixed amount
    of $$ I was hoping to diversify by selecting many different funds...
    when I discovered that some of the funds I was interested in had $2-3K
    mins...greatly reducing my diversification plan.  
    
    Since this is intended to be a long term investment... (.1) expense
    ratios will become a factor.
    
    (.2)I don't have an answer to your question...My understanding was it
    was enforced at entry...after that negitive variance was allowed to
    a point.
    
    (.3)RE: MARKETINGs "basic rule"...isn't the bottom line the best
    marketing feature? ...even though you can't count on future performance
    to be the same...past performance is all you really have for the record
    or bottom line.
    
    dave

>    (.3)RE: MARKETINGs "basic rule"...isn't the bottom line the best
>    marketing feature? ...even though you can't count on future performance
>    to be the same...past performance is all you really have for the record
>    or bottom line.
    
    I may not have been clear.  My comments on the strategy for Marketing
    Mutual Funds was from the Funds' perspective. In their quest for that
    magical increase in market share, marketing theoreticians often lose
    sight of what the consumer wants.  A myopia not limited to the
    investments field.
    
    From a BUYERS perspective, all I want to know is how much I will put in
    my pocket after xxx time.  Caveats notwithstanding, past performance is
    a valid indicator - as long as fund strategy and management remain the
    same.
    
    Dave
    

Speaking of fund minimums.. Are there any funds left that still have min. 
initial investment limits of under $100?  I want to use the UGMA to give
a gift to a couple of kids. 20th century fund used to have very low mins.
but they've gone up and have imposed a $10 charge for accounts under $1,000.
Any info. and phone #s would be appreciated.

				thanks, Steve

    20th Century (as of yesterday) still has $0 mins (growth funds at
    least), however, any fund under $1000 requires $25 monthly
    contribution.
    
    dave
    
    BTW...expect 1-2% expense ratio
    

    Fidelity will now waive the $1000 minimum for UGMA's (BlueChip,
    Growth&Income, AssetManager, or CashReserves) if you set up an
    automatic deposit plan (at least $100 a month ? - or something like
    that).
    
    L.

    Last time I checked, Janus allows you to start with no minimums ONLY if
    you sign up for automatic investment program ($50/month minimum).

Berger Funds: 	$250 min (800)333-1001
PAX World Fund: $250 min (800)767-1729
Franklin Funds: $100 min (800)DIAL-BEN {=342-5236}
Financial Funds:$250 min (800)525-8085

By the way: Twentieth Century sent out a letter to shareholders recently which stated
that after the first of the year, any accounts with balances below $1000 would be 
cashed out.  

>    Consider two highly-rated no-load funds:

>    Financial Industrial Income - $250 min - 1.24 expense ratio
>    Vanguard Wellesly Income - $3000 min - 0.40 expense ratio
    
Let me add a third:
    
    SAVE Program Fund E, Vanguard Instititional Index
    $10,000,000 Mininum,   0.09% expense ratio, Page 2, Prospectus 5/3/91.
    
    Now that's a benchmark to beat.
    
        

    

I'll stretch this limits of this topic and ask about minimums for money market
funds.  I'm looking for a taxable MM fund that accepts small deposits and
lets you write small checks.  Fidelity Cash Reserves doesn't accept checks
under $100 for deposit, nor does it let you write checks for less than $500.
I'm trying to beat this.

	Re. .12

	I doubt if you will find such MM funds amongst the MM mutual funds -
	the overhead for processing small transactions would be too high. 

	OTOH, you can open an MM account at your local Baybank with minimum
	$1500 (to not incur any fees) and deposit/withdraw any amount you
	like. Of course, they pay 2% currently :-(. 

	What's wrong with having 2 accounts, one at your local bank for
	small transactions, and one at Fidelity for large ones?

	-amitabh.

re .13:

It's currently *in* a local bank.  This is an account for a non-profit
organization.  The bank that it's currently in (Shawmut) has promised
to begin treating it as a business account ($12 fee per month) as soon
as they get their act together following their consolidation with
Provident.  I've had this account at three different banks, each of
which has changed their rules to make it unattractive.  The account
isn't all that small ($5000-$10000 range), and most of the deposits
and withdrawals do fit into Fidelity's requirements, but I may occasionally
need to deposit a check of less than $50 or write one of less than $500.

    I have some money in Benham's Government Agency Fund.  I believe you
    need $1000 to open an account and I can write checks for a minimum of
    $100.  I'm not sure what the minimum deposit is since I've always
    deposited at least $200 but I don't remember ever seeing any minimum on
    the deposit amount.  It's tax free in MA and several other states and
    has pretty low expenses.
    
    							John