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Comments

SoFarSoGood

As a young person with a concience I really like Pax World Funds. They're no load, and while not indexed (they can't be indexed as a SRI), they are diverse. You can open an account for $500 with a monthly deposit.

dcpi

You are right in assuming that Vanguard does not have a low balance requirement for opening a fund because they will be unable to make money on the product.

Most fund firms I am familiar with calculate with regularity the average life of an account, and if there is money to be made they will offer you something.

You will likely never see index funds with low balance requirements since they simply do not carry enough fees to be profitable to small accounts (Vanguard pushes for accounts north of $10,000).

FWIW, American Century built its franchise by courting small investors with low minimums and regular deposit plans. There are a few others out there too -- mostly small shops run by passionate stock pickers.

If you want to invest in index funds with a small amount of money you should find a discount broker and purchase ETFs. Even then, though, you must watch the brokerage fees to keep your expenses in line.

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