Smaller Can Be Better

If you're looking to get more with your investments, you may want to consider mutual funds that specialize in large companies. But recently, many of the large-company funds have increased the minimum investment you need to put down to get started. Many but not all. Ray Hennessey, editor, offers some advice.

There is still a good selection of funds available, Hennessey says. Vanguard and Fidelity are raising their minimum investments, "but more than half of the funds out there still have minimums that are at one thousand or less," he explains. "For the most part, the returns are good."

However, Hennessey warns if you do decide to go with the lower minimum funds, you do lose some of the return side. The average return for a lower minimum fund is 5.25 percent where as a higher minimum would give you a return of 6.34 percent.

There are some real gems in the low minimum funds. The Bruce Fund has a 34.86 percent return and the Alpine Equity returned about 29.9 percent. "My favorite is the Excelsior Fund," Hennessey says. They have had a good return of about 18.9 percent. "The best part about that is you only needed a 250 dollar minimum."

There are some things you should look for when you are looking at smaller funds. You want to know how long has the manager been there and how nimble are they. "The best part about some of these smaller minimum funds is they are also smaller fund so they have more room to grow," says Hennessey.
by Jenn Eaker