Released: April 02, 2007

Some funds still let you start small

Source: John Waggoner, USA Today

Most of the mutual fund industry has a special place for small, do-it-yourself investors. It’s a magic land called “somewhere else.”

Fortunately, though, a few fund families will let you start small. Still, if you want your account to grow significantly, you’re going to have to increase your contributions over time.

Funds that let you start an account with very little money are typically those sold by brokers. The American Funds Growth Fund of America, the largest fund in the land, will let you start with $250. Davis New York Venture will get you going with an initial $1,000. Van Kampen Comstock will take any amount to start.

But there are two drawbacks with broker-sold funds, at least from the point of view of a small investor. The first is the sales commission, or load, which will consume up to 5.75% of your initial investment.

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