Saturday, December 25, 2010

Account Minimum

An account minimum is the smallest amount of funds, or initial investment, that a client may invest in the fund. The minimum investment amount is set by the fund management company and is typically based on factors like what their target market is and the cost of servicing clients versus the amount of revenue generated. The purpose of a minimum holding is largely due to cost practicality. Hedge funds and institutional funds typically have much larger minimum investment amounts, sometimes upwards of $50,000 or even $500,000 in some cases.

Synonyms: Minimum investment, Minimum holding
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