When Fund Rules Change

Another case in which a fund may increase its minimums is if it isn't able to gain substantial assets or grow the accounts enough to make them profitable; both scenarios can make it tough to manage administrative costs.

Tom Roseen, a senior research analyst with Lipper, says that in the late '90s, a lot of funds were launching with minimum investments of $50 to $250. The idea was to attract those retail investors who had less money to invest than others.

However, he says, many of those fund families weren't able to cover their administrative costs and therefore had to raise minimums.

TIAA-CREF is a good example. The company had started several funds with $100 minimums, but because many of the accounts didn't attract sufficient assets, the company was forced to raise the minimums to $1,500 in order to cover costs.

Roseen says that there are still some fund families with initial requirements of $250 or $500; however, they often mandate that individuals set up automatic investment plans in order to qualify for the lower initial amounts.

While minimums on the whole are creeping up, funds do, on occasion, lower them.