GNMA Funds

Some time ago you wrote that Ginnie Mae (GNMA) securities required $25,000 to get into. But, I invested only $15,000, and my interest is reinvested regularly. Is there a difference in how one invests? M. S.

Investing directly in Government National Mortgage Administration (GNMA) securities requires $25,000 minimum. However, at least two mutual funds invest in the GNMA securities and sell shares for as little as $1,000 to start. Interest from the agency securities would have to be accumulated and invested elsewhere to maintain compounding. However, income from the mutual fund shares can be automatically reinvested in more shares to keep all the money working. Mutual funds charge a management fee which is taken out of te income, but the other advantages will outweigh that relatively small cost for investors with less than $25,000.

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