Simply put:

1) you must buy the minimal initial investment amount on your first buy of the fund, no matter how you pay it (by check, wire transfer, bank transfer, etc).

2) after the initial buy, the following buys (additional investment), you must buy the minimal amount each time, no matter how you pay it (by check, wire transfer, bank transfer, etc). Or, you can set up your account, so that at your specified date, they can automatically charge certain amount from your bank account and buy the fund.

3) finally, if you like, you can just buy it the first time, and no need to buy additional amount each month, etc.

Take this as example:

http://finance.yahoo.com/q/pi?s=PRLAX

The first time, you must buy at least 2500$. After that, any additonal investment (if you like), it must be at least 100$.

For example, if you want to invest 5000$ in total, should you buy 5000$ the first time, or only buy 3000$ the firs time, then each month add 100$ (for 20 month): this is totall your own choice.

If your fund has dividend, it may pay you once a year (usually this way, and in december), or at a specified time (you need to read their "prospectus").

But normally, many people (under 40 years old, I guess) buy fund for their value appreciate (price goes up), then they either hold it for more price go up, or sell them to get the profit. It works very similar to buy or sell a stock.

Please note that: the price of fund may also go down, so you may also lose money, just like that of a stock (many funds are based on stocks).

Simply put:

If you bought a fund which worth 5000$. And after one month, the value of the fund roses to 5500$. Then you sell it for 5500$. Then your profit will will be 500$ (let's ignore any transaction fees here). Since you only invested 5000$, so the rate of return will be 500/5000, which is 10% for this month. Note this is for one month only.

Usually, people use year as the unit of time. In the above case, your return will be: 10% per month, times 12 months a year, with the assumption that the performance will remain the same over the year. So your return rate is about 10%x12 = 120% (which usually it too good to be true though).

When people talks about return, they usually refers to the above return by year, ignoring any transaction fee or broker fees, tax, etc.

If your funds has dividend, then simply add the dividend rate to the above return, as a rough extimate (I say "rough", since there are a lot other issues). Unless you buy these dividend rich funds, usually, your return is mostly determined by the appreciation of the fund's price (just like a stock).

As a final way to help you understand it, just go to finance.yahoo.com, type in your fund's ticker, then go to its "Performance" on the left, watch for the numbers in the section "TRAILING RETURNS (%) VS. BENCHMARKS", and "ANNUAL TOTAL RETURN (%) HISTORY". These are the numbers you may most be interested in ---- in terms of the "return".

For example, this one: http://finance.yahoo.com/q/pm?s=PRLAX

The above is just my 2 cents, mostly based on general stock based funds.

[此贴子已经被作者于2007-1-13 21:06:07编辑过]