(MONEY Magazine) – One of the safest, surest ways to build a bundle in mutual funds is by using the technique called dollar-cost averaging -- investing fixed amounts at regular intervals over a span of years. You acquire fewer shares when prices are high, more when they are low -- and all of them compound handsomely. To encourage such programs, several funds, including some in the Fidelity and First Investors groups, offer so-called contractual plans in which investors agree to contribute as little as $25 a month for a period of 10, 15 or 25 years. These arrangements are so attractive sounding that they piled up $471.8 million in sales last year, a 135% increase from 1985. But that's not to say that the plans are necessarily worth the onerous administrative charges that all of them assess. If, for example, you sign on for the 15-year, $50-a-month plan of Summit Investors, one of the nine funds in Houston's AIM family, 53% of your first year's investment will be deducted for expenses. After two years, you will have ponied up $1,200 ($50 times 24 months), but only $830.76 will be working for you. The other 31% goes to pay what the sales contract calls ''creation and sales charges.'' These expenses do decline dramatically after the early years. Yet over the complete 15-year, $50-a-month time frame, Summit's takeout will equal 11.5% of your total payments. The Fidelity Destiny I and Destiny II funds accept monthly installments of as little as $25 in 10-year, 15-year or 25-year plans. But the two growth funds each nip at least 50% of your investment in fees the first year on monthly plans in which the installments are $400 or less. By the end of the second year, only 69% of what you put in will actually be invested. The cumulative takeout of a 10-year, $25-a-month Destiny plan is 12%. In fiscal 1986, 15.6% of the $581 million invested in Destiny I went to pay sales charges and custodial fees. This is a double shame, first, because the immutable law of mathematics dictates that earnings that compound longest compound most and, second, because both of these Fidelity funds have superior records. Destiny I is up 40% for the 12 months to Aug. 1, compared with 26.2% for the average stock fund, and Destiny II is up 44.9%. So what is the sponsors' defense? ''If investors have the self-discipline to keep up an investment plan and don't need help, that's fine,'' says Bill Ryan, vice president of Fidelity's broker-dealer division. ''But the savings rate in the U.S. is pathetic. Contract plans are for people who need structure.'' Adds Stan Sinnott of Topeka's Security Distributors: ''The contract-plan investor is a tough sell, and brokers have to be paid accordingly.''

The key point is that dollar-cost averagers can save substantially if they can devise and stick to a systematic investment program of their own. One company that is suited to such investors is the Twentieth Century fund group (800-345-2021), which imposes no investment minimum and no sales charges on two of its five stock funds and only a 0.5% load on the other three. The no- load T. Rowe Price funds (800-638-5660, 301-547-2308 in Maryland) will lower minimums to $50 for investors who state an intention to establish their own dollar-cost averaging plan. The no-load Manhattan, Guardian and Partners funds from Neuberger & Berman (800-237-1413) do demand an initial minimum of $500 but accept subsequent investments of as little as $50. In investing, in any case, the rewards of self-discipline are incalculable.

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