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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: of 75340  
Subject: Re: Morningstar quote purchase info Date: 4/8/2006 12:18 AM
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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.)
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