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Great Mutual Funds for Kids
By JLP | June 14, 2006
Today’s Getting Going column by Jonathan Clements talks about four mutual funds that are great for kids:
AARP Aggressive Fund (Minimum Investement: $100 / Annual Expenses: .50% / Ticker: N/A) - It seems strange to start a kid out in a fund managed by a group associated with retirees, but Clements likes the fund’s performance and its low expenses.
Homestead Value Fund (Minimum Investement: $500 / Annual Expenses: .76% / Ticker: HOVLX) - Solid performance from a value fund and a very low turnover rate of 13%, something to consider for taxable accounts.
Pax World Balanced Fund (Minimum Investement: $250 / Annual Expenses: .96% / Ticker: PAXWX) - A mutual fund for the “socially-minded” kid.
Vanguard STAR Fund (Minimum Investement: $1,000 / Annual Expenses: .36% / Ticker: VGSTX) - Most Vanguard funds require a $3,000 minimum investement. The STAR fund only requires a $1,000 minimum investment. Clements suggests using this fund as a way to get into Vanguard and then switch to their Target Retirment funds once there is $3,000 in the account.
For some reason I can’t find the ticker symbol for the AARP Aggressive fund. If you know the symbol, please let me know.
Topics: Getting Going, Investing, Jonathan Clements, Kids and Money, Mutual Funds |
June 14th, 2006 at 3:09 pm
Personally I think it is probably more interesting for kids to have a couple shares of individual stocks, since the idea behind mutual funds is likely to baffle anyone younger than 10 or 12. But the low minimums are helpful for anybody who doesn’t have much… even if you are not a kid.
June 14th, 2006 at 3:14 pm
Kira,
I agree but I think it is also good to teach kids about diversification, which is hard to do if they only own a couple of shares of stock.
June 15th, 2006 at 2:06 pm
The ticker symbol for the AARP Aggressive fund is not yet available. It is not assigned a ticker until the fund reaches a certain threshold of assets. Then I suppose AARP will request one, or have one assigned to them according a pleasant conversation I had with John @ AARP.
The ticker is coming, but not just yet today.
According to the promotional material and the fellow at AARP, the funds keep a low expense ratio (0.50% through 11/2007, then could go lower) due to being passively invested in indexes.
June 30th, 2006 at 7:07 pm
I didn’t find the article that helpful. Clements goes way out recommending some actively managed funds. And, Vanguard really is being ridiculous to say they can’t afford to have mutual funds for less than 1000 dollars as a starter balance. They don’t liquidate taxable accounts until they fall to 500 dollars. A balance of 750 would have to lose 33 percent to get there… and what’s the chance of that?
May 5th, 2008 at 4:22 pm
We love the Monetta Young Investor Fund. The Fund is kids themed,neat stock market game and age-based investment kids. The minimum investment is $250 with an AIP of $25 per month…very affordable. The ticker symbol is MYIFX with a capped expense ratio of 1%. Chech it out.