AboutWarren Boroson Expertise Author of "Keys to Investing in Mutual Funds" (Barrons), "Ultimate Mutual Fund Guide" (Probus), "How to Pick Stocks Like Warren Buffett" (JKLasser), and "The Reverse Mortgage Advantage" (McGraw-Hill). Former financial columnist for Gannett News Service.
Experience Author of 20 books; winner of 1996 Personal Finance award from Investment Company Institute and Washington University. Formerly on staffs of Money and Sylvia Porter's Magazine. Had a radio program (on WEVD) about mutual funds and a newsletter, FundDigest.
Expert: Warren Boroson Date: 1/4/2005 Subject: Index Funds
Question Hi. I'm looking for an index fund with a low initial investment requirement. Also a no-load fund would be key. I'm going for the buy and hold stategy so I need something that will be reliable for the future. If you would know of any that would be greatly appreciated.
Thanks.
Joel Kienle
Answer Dear Joel Kienle:
Apparently $1,000 is the lowest minumum that no-load index funds based on the S&P 500 charge. But I notice that at least one such fund has underperformed its peers, which might be accounted for by its relatively low minimum. (Its expenses may be higher.)
Fidelity has lowered the expenses on its index funds to 0.10 percent a year, but skeptics--including people at Vanguard, Fidelity's rival--think that that's a "teaser" rate, and it will rise.
Vanguard is the class act among index funds, but there are other good ones, such as USAA's.
You could buy an Exchange Traded Fund, but you would have to pay commissions to reinvest.
