Vanguard Group Inc wants to help investors watch their money while they're on the go, even as it wonders how much interest its long-term oriented customers have in minute-by-minute updates.

The Pennsylvania investment giant is readying an application for Apple Inc's iPhone that will be a first in the mutual funds industry. It follows similar applications from Bank of America Corp and E*Trade Financial Corp that allow customers to check their balances, pay bills or trade shares from mobile devices.

But mutual fund firms have preached a buy-and-hold message for years and have been slower to add mobile capabilities that could give twitchy customers too much freedom to move their money into hot stocks.

Vanguard executives say their customers are getting more used to mobile devices, but even so they sound tentative describing the application they hope to have out by October.

It is not by any means a killer app, said Colin Kelton, principal of Vanguard's retail investor group. Of the 300,000 people who check in on daily, for instance, only 1 percent log in from mobile phones, he said.

Still, that will likely change as customers get more comfortable with mobile financial services, said Yankee Group technology analyst Jon Paisner.

The situation of the fund firms resembles the one banks were in several years ago, he added. Banks focused at first on granting mobile access to account information and only later added functions like paying bills online.

In an upcoming survey, Yankee Group projects there will be 38 million mobile banking users by 2013, up from 10.1 million now, who will be making transactions worth $127 billion a year, up from $13.5 billion today.

(Editing by Gary Hill)