5 Ways to Invest That Stimulus Check

Still wondering what to do with your $600 windfall? If you've already got a nice savings cushion going, consider kick-starting a portfolio (or adding to an existing one). Here are five mutual funds that require small initial investments:

Pax World Balanced ($250 minimum): Pax, the granddaddy of socially screened mutual funds, avoids companies that derive significant revenue from weapons, gambling, or tobacco and favors those with good track records on issues such as the environment. In one dose, Pax World Balanced offers a diversified portfolio that contains stocks (both foreign and domestic), bonds, and a little cash. The fund, which has gained an average of 7 percent per year over the past decade, charges 0.96 percent in annual fees.

Pax World Global Green ($250 minimum): This new fund, which started at the end of March, invests in companies working to improve the environment. Areas of focus include alternative energy and energy efficiency, pollution prevention and control, and waste technology and resource management. The go-anywhere fund, which charges 1.40 percent in annual expenses, isn't tied to a particular investing style and buys companies of any size and in any sector.

Hodges Fund ($250 minimum): An aggressive fund is Dallas-based Hodges, run by father-and-son team Don and Craig Hodges. The Hodgeses are a freewheeling pair who invest in companies of all sizes with strong growth prospects. Hefty bets in the energy sector have helped boost the fund to a whopping 24 percent annualized return over the past five years. Annual fees are 1.46 percent.

Homestead Value ($500 minimum): This bargain-hunting fund is still run by the same management team that started it back in 1990. Fundamentally strong large and midsize companies that have hit short-term snags populate Homestead's portfolio. This slow-and-steady fund, which has a 0.71 percent expense ratio, has gained an average of 6 percent a year over the past decade.

Amana Growth ($250 minimum): Amana, a fund that invests according to Islamic principles, may seem like an offbeat choice. But you can't argue with its performance: The fund has gained an annualized 11 percent over the past 10 years (and an annualized 20 percent over the past five years), ranking it in the top 1 percent of all funds that invest in large, fast-growing companies. Amana avoids companies in the business of borrowing or lending money—and those that charge interest—so financial stocks are out. It also avoids companies that draw a large chunk of revenue from alcohol, tobacco, pork, gambling, or pornography.

If you're investing as a couple, Morningstar suggests you buy the Vanguard Star fund (it requires a minimum investment of $1,000). Writes Christine Benz, Morningstar's director of personal finance, "If you invested your $1,200 stimulus check in Vanguard STAR and earned a 6 percent average return over the next decade, you'd have $2,085 at the end of the period. Your assets would have the potential to grow at an even faster clip if you made additional contributions." The fund invests in a diverse set of 11 actively managed Vanguard funds, including three bond funds and eight stock funds. It charges 0.32 percent in annual fees.

The Wall Street Journal also has some ideas for ways to invest your stimulus money. Suggestions include a tax-exempt money market fund, a short-term bond fund, and a few individual stocks. Among mutual funds, the Journal recommends the Gateway fund, which uses a hedging strategy to minimize volatility. Essentially, it aims to mimic the S&P 500's performance, minus the gut-wrenching, short-term drops. The fund has actually surpassed the S&P's return over the past decade by 2 percentage points—and with a fraction of its volatility. One problem: Gateway, which was previously sold as a no-load fund with a $1,000 minimum investment, was recently acquired by a firm that now charges 5.75 percent to invest and requires $2,500 upfront.