UnThreaded | Threaded | Whole Thread (4) | Ignore Thread Prev Thread | Next Thread
Author: Dullchisel One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75379  
Subject: Morningstar quote purchase info Date: 4/6/2006 11:52 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
In the purchase info for a fund quote ... minimum investment ... what does it mean if it shows --- for an Initial IRA and Additional IRA? Does it mean it's the same as regular initial or something else?

DC
Print the post Back To Top
Author: Dullchisel One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 50975 of 75379
Subject: Re: Morningstar quote purchase info Date: 4/7/2006 1:31 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
P.S.

Sorry, apparently I did not make myself clear ... here is an example of what I mean .. the screen contains "---" ....

http://quicktake.morningstar.com/Fund/Purchase.asp?Country=USA&Symbol=PSPFX&fdtab=purchase

DC


Print the post Back To Top
Author: DeltaOne81 Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 50980 of 75379
Subject: Re: Morningstar quote purchase info Date: 4/7/2006 9:39 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
Its talking about the minimum initial investment (when held in an IRA). And the minimum additional investment after the fact.

For instance, in a taxable account, that fund requires a $5000 minimum intial deposit. After that, you can add money a minimum of $50 at a time.

Funds often have different requirements for IRAs, since its harder to get a lot of money in an IRA, so the mininums are often less.

Since the IRA lines are blank, I would figure that means the the IRA requirements are the same as the regular ones, but I can't say for sure. You may want to read the prospectus to clarify why it left them blank.

Print the post Back To Top
Author: Mark12547 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 50992 of 75379
Subject: Re: Morningstar quote purchase info Date: 4/8/2006 12:18 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
what does it mean if it shows "---" [instead of dollar amount] for an Initial IRA and Additional IRA?

That's a good question!

I could think of two possibilities:

1. What DeltaOne81 said: the numbers are the same as for a regular account.

2. It could be that the fund isn't suitable for holding in an IRA account. Typical types of funds that aren't suitable for inside an IRA include municipal bonds (municipal bonds typically have lower yields than treasuries or corporates and the tax advantage of municipal bonds are lost inside a "tax favored" account) and funds that are "tax managed" (since the fund manager is following strategies to maximize after tax returns and that may reduce the total returns before taxes, or, for foreign taxes, to let the investor enjoy as much of the foreign tax credit as possible, both the sacrificing of some of the total returns to maximize after-tax returns and the passing of foreign tax credit to the investor would be lost in a "tax favored" account).

If you are interested in a particular fund, it is probably best to get a copy of the prospectus and read it. The prospectus should let you know if the fund is not suitable for inside a "tax favored" account.

By the way, there is a second reason why a fund may have lower minimums inside an IRA: funds in retirement accounts tend to have lower investor turnover, so, even though IRA balances often start lower, the lower investor turnover reduces the fund's expenses in servicing those customers. (The minimums are usually to discourage very small accounts or tiny additional investment amounts that are expensive to administer. Large minimums, on the other hand, are typically to discourage smaller individual investors, which tend to jump in to and out of funds far more frequently than institutions.)

Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
UnThreaded | Threaded | Whole Thread (4) | Ignore Thread Prev Thread | Next Thread
Advertisement