Kids Fund Mutual Fund Review
This is a new mutual fund call the Kids Fund. The Kids Fund mutual fund is designed to help parents teach their children about investing and help them to build savings at an early age. However, I question whether the Kids Fund (KIDSX) is actually going to help teach kids about investing and whether it is actually a good investment. I will explore these issues in this Kids Fund mutual fund review.
The Kids Fund is managed by Will Hepburn of Hepburn Capital Management in Prescott Arizona. This mutual fund will invest in companies that kids know and are interested in. I assume that this means that the fund will invest in companies like Disney, Nike, etc.
In addition to investing in these kid friendly companies, Hepburn Capital Management has stated that is will provide its investors, parents and their children, educational materials to help them learn to invest. This sounds great, but do you need to invest in a mutual fund like this in order to teach your kids how to invest?
I believe that the Kids Fund is wrong on so many levels. First, I don’t think that it will be a good investment. I absolutely hate these theme mutual funds. Does this fund believe that these kid friendly companies represent a market that is going to be profitable? Better stated, will these companies out perform other companies. I believe that this has little to do with making smart investments, and a lot to do with a marketing scam.
As additional proof that this is about marketing and not about prudent investing, the expense ratio for the Kids Fund is 2.05%. This is a pretty high expense ratio. I don’t know about you, but I want my kids to learn to invest in mutual funds with low expense ratios.
Is the Kids Fund a no-load fund? Nope. Stop right there. Why would you ever invest in a load mutual fund. The front-end load on the Kids Fund is 5.75%. That is huge. These expenses and fee are unacceptable.
Parents, listen up. If you want to teach your kids about investing, explain to them why the Kids Fund mutual fund is a bad investment. And, then go find a no-load, low expense ratio fund for them to invest in.
I recommend checking out Vanguard mutual funds and index funds. Vanguard mutual funds often have low fees and expenses. Index funds almost always minimize expenses.
What do you think of this Kids Fund mutual fund review? Am I being too harsh on the Kids Fund? I would love to hear your thoughts.
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