Rules

Rules

In January, 1993, family members must choose first mutual fund from the initial six Invesco mutual funds offered. (See history). No two family members can own the same mutual fund at the same time. First come, first choice. Effective September, 2001, an exception is made for Vanguard Inflation Protected Securities Fund because of the scarcity of mutual funds holding TIPS. Any family member may hold VIPSX.
Contribution of $50/month will be made "for a long time." Later raised to $75/month and then to $100/month. (See contributions).
Although the money belongs to each individual family member, it cannot be spent without agreement of parent. Spending all funds ends the gift.
A savings account (belonging to parents) will be started and equal monthly contributions will be made to compare savings' performance with mutual funds' performance.
As value of individual mutual funds grow to an amount greater than minimum investment for other mutual fund families, individuals are free to switch funds at any time. However, the proposed new mutual fund cannot have a minimum monthly reinvestment greater than amount of monthly contribution gift (presently $100/month).
Family members are to do their own research on mutual funds and are solely responsible for the final investment decision.
Funds are owned in name of family member with his/her social security number. Once child reaches age 18, family member is responsible for paying federal income tax on family mutual fund holdings.
Original rules required all funds to be 100% invested at all times.
Effective 1/1/00, a family member could go to cash and remain so for up to 90 days. Interest earned in a money market account will be credited to the individual's account.
In December, 1999, a one time potential bonus was announced as follows. If an individual can avoid losing money in the year 2000, a $100 bonus will be paid to the individual's mutual fund of choice. Awarding the bonus is calculated as follows. Take 12/31/99 mutual fund value for individual, add $1200 to be contributed in year 2000. If sum of 12/99 value plus $1200 exceeds 12/31/00 mutual fund value for individual, $100 bonus is payable. See bonus standings.
Effective 1/1/01, a family member can go to cash and remain there indefinitely. Interest earned in a money market account will be credited to the individual's account.
Effective 1/1/01, a family member can invest in individual stocks instead of mutual funds.

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