History

History

The family mutual funds originated with a gift in December, 1992. The purpose was to teach all family members, children as well as parents, how to invest in mutual funds.

Each family member, including parents, received a mutual fund with a small initial investment requirement ($250). The gift included a monthly contribution of $50/month for the mutual fund. Each family member had to choose the original mutual fund and to control investment in that fund and successor funds in the future. In December, 1992, the oldest daughter (K) was 14 and the youngest daughter (E) was 12.

The gift was a typed piece of paper which read as follows:

"A Mutual Fund"

1. Pick one of these funds by January 3, 1993.

2. Dad will invest $50/month for a long time.

3. You must agree not to spend this money, although it is yours, until you and Dad agree.

The paper was dated and then signed by Dad and by the family member. Attached were Xerox copies of Morningstar reports from six funds (all rated 5 star at the time) from Invesco (Technology, Financial Services, Health Sciences, Leisure, Industrial Income, and Flex (now Total Return)). Invesco was chosen because at that time it had a low minimum initial purchase ($250) and a low minimum monthly purchase ($50/month).

Family members made their choices by January 3. Funds were purchased from January 11 to 14, 1993 at the minimum $250 initial purchase. At the same time, a savings account was started with $250. Monthly purchases in the amount of $50/month began February 1, 1993 for each of the four funds plus the savings account.

The savings account was started and has been maintained for comparison with the mutual fund performance of the years. For this comparison, see Current Values.

The monthly purchases remained at $50 a month until each fund had a total of $1000 contributed to it. A second gift to each family member in December, 1993, raised the monthly contribution by $25/month to a total of $75 a month effective 5/1/94. When all funds had exactly $2500 contributed to them (12/1/95), a final gift in December, 1995 added an additional $25/month contribution, raising it to $100 per month. (All increased monthly contributions applied to the savings account also.) For a table listing amounts contributed, go to contributions.

When the size of the individual mutual fund accounts grew to an amount large enough to invest in other mutual fund companies (usually at the $1000 or $2500 level), family members were free to switch mutual funds so long as the minimum monthly investment remained at $50/month (or $75 or $100 depending on the time.) Family members are required to do their own research on new mutual fund investments. For a further description, see Rules.

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