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They don't sell mutual fund gift cards at your local supermarket or drug store.
If you want to pass along your passion for investing as something that "keeps on giving," however, there are ways to make a gift of shares.
Just don't expect it to be easy to make an investment and put a bow on it.
Years ago, several fund companies had gift-of-shares programs, where buyers effectively were giving a card or certificate from the fund company, along with a pledge to make an investment in the recipient's name. Recipients would pick the fund of their choice from within the fund family.
While those programs seem to have died off due to lack of interest/awareness, you always were better off coming up with your own creative way to turn investments into holiday gifts.
Funds that were created with an eye towards being a gift also have mostly disappeared too.
American Century Giftrust - the only mutual fund ever created expressly as a gift (you could buy shares only for someone else) - was renamed American Century All Cap in 2011; while it still allows people to buy shares for someone else in an irrevocable trust, that's never been the most comfortable structure, as it's more like saying "Here's this year's gift, enjoy it 10 years from now when you can cash out."
"Young investor" funds, built for kids and trading mostly in names that children would recognize and understand, have mostly died off too, though Monetta Young Investor (MYIFX) remains, and carries a top track record in the large-cap growth category over the last five years, according to Morningstar. That fund has a lot of materials that help explain investing to children, although you don't have to be a shareholder to take advantage of the younginvestorfund.com web site for its educational games and such.
USAA First Start (UFSGX), likewise, was built and marketed to be the starter kit for a new investor, and it has consistently been in the top third of its peer group.
But the truth is that investors who want to give financial gifts should think, well, outside the box. Typically, that means coming up with a gift of securities that meets their investment criterion, things they can then explain to the recipient so that the long-term gift is the financial insight, more than the money involved.
Sadly, it's not as simple as "buy my favorite fund for the grandkids," because investment minimums could make the purchase price prohibitive (even gifting some of your existing shares from an existing fund account could face account-minimum issues).
Many firms drop initial investment requirements to $500 or $1,000 for custodial accounts for minor children - call to inquire - but that's no help if your intended recipient is above age 18. The Mutual Fund Education Alliance (www.mfea.com) maintains a comprehensive "fund quicklist" of issues that let investors buy in for $50 or less, although some of those funds give the low entry price only to investors who agree to make regular monthly deposits.
If the minimum investment, or the lack of a gift-of-shares program, forces you outside your normal fund favorites, some options may be tough to stomach. Funds with little or no minimum often have above-average expenses, necessary to cover the burden of so many small-dollar accounts.
One more pitfall: Unless you are acting as custodian for a minor child - or are in cahoots with the person who will be - you can't actually buy fund shares for someone else. The gift recipient has to sign the paperwork (which is why those "gift of shares" programs are little more than a card and a prospectus).
You could deposit money into a college savings program, but because the money will then have to be used on qualified educational expenses it may feel less like a "gift."
If you decide to go instead with giving stocks or ETFs, there are other challenges, most notably that many brokerage firms have big fees on small transactions and/or outrageous charges for requesting a physical certificate (which may not be delivered in time for the holidays even if you make the trade now). That feels a bit like paying more for gift-wrapping and shipping than for the present.
Direct-share ownership makes it possible to buy shares and have them registered for the recipient, but a book-entry security doesn't exactly look great under the tree or next to the menorah.
Ultimately, the best way to gift an investment is to pick what you want and can afford, prepare the paperwork, wrap up the prospectus (or the company's product in the case of a stock) and have the whole thing ready to go in the mail moments after the present is opened.
But in the creative display you build around that paperwork, include your investment philosophy and wisdom, the list of factors that led you to make this specific choice. Review that with the recipient and you could spur good investing habits that make sure your gift of investing lasts well beyond the lifespan of this year's hot toy, doll or video game.
Chuck Jaffe, senior columnist for MarketWatch, can be reached at email@example.com.