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INVESTORS FLOCK TO DEFENSIVE FUNDS

 INVESTORS FLOCK TO DEFENSIVE FUNDS
 /ADVANCE/ NEW YORK, May 10 /PRNewswire/ -- Anxious to cash in on a


booming stock market but fearful of a setback, small investors have been pouring hundreds of millions of dollars into defensive asset-allocation funds, according to Money magazine's Small Investor Index.
 Such funds spread their money among stocks, bonds and cash investments. This diversification typically keeps the funds from rising as high as pure stock funds when the market is hot -- but also prevents them from falling as much as stock funds when share prices take a dive.
 In 1991, the average growth-stock fund was up 36.7 percent, but asset-allocation funds rose only 20.5 percent, according to Morningstar, a mutual fund rating service in Chicago. By contrast, in 1990, when stock funds dropped 6.2 percent, asset-allocation funds lost a mere 2.2 percent.
 Since Jan. 1, as stock prices have soared, these defensive funds have become increasingly popular. "The Fidelity Asset Manager is one of our hottest selling funds because investors want a safety net right now," says Michael Hines, head of fund marketing at Fidelity Investments in Boston. Assets of the three-year-old fund rose from $1 billion on Jan. 1 to $1.8 billion in early May.
 Similarly, the Vanguard Star Fund, which invests its assets of $1.9 billion in a mix of nine Vanguard stock, bond and money-market funds, attracted a net $85 million in March and another $89 million in April.
 Morningstar analyst Helen Johnstone says: "Asset-allocation funds make sense for conservative investors who want to have a cushion at all times."
 Last week, the Small Investor Index, which tracks the average individual's holdings, rose $207 to a record $45,999. Stocks gained $108, while bonds added $80. Certificates of deposit and money-market funds contributed $14, and gold rose $5.
 This Last Year % Change from a
 Week Week Ago Week Ago Year Ago
 102.27 101.81 93.68 +0.45% +9.17%
 Latest Changes for Each Asset
 % Change from a
 Category Index Week Ago Year Ago
 Stocks:
 NYSE 103.79 +0.38% +11.90%
 ASE/OTC 104.98 +1.47 +17.95
 Equity funds 104.25 +0.95 +12.46
 Bonds:
 Taxable bonds 100.63 +0.58 +10.87
 Municipals 102.07 +1.17 +9.43
 Bond funds 101.18 +0.40 +11.59
 Short-term assets:
 CDs 101.61 +0.08 +5.35
 Cash 101.41 +0.07 +4.55
 Other:
 Real estate 98.00 -0.05 -5.74
 Gold 91.86 +2.39 -4.84
 Dec. 27, 1991 equals 100
 Where Average Small Investors Have Their Money Now
 Current Year Ago Current Year Ago
 NYSE 22.16% 21.90% Bond funds 5.38% 4.37%
 ASE/OTC 7.00 6.92 CDs 16.20 19.40
 Equity funds 5.20 4.27 Cash 23.19 21.65
 Taxable bonds 12.70 13.13 Real estate 0.76 0.76
 Municipals 6.91 7.08 Gold 0.51 0.53
 Sources: Bank Rate Monitor, IBC/Donoghue's Money Fund Report, the Federal Reserve, Investment Company Institute, Lehman Bros., Lipper Analytical Services, Merrill Lynch, Morgan Stanley Capital International, National Association of Real Estate Investment Trusts, Prudential Asset Management, Standard & Poor's, Robert Stanger & Co., World Gold Council.
 -0- 5/11/92
 /NOTE TO EDITORS: This material is also available in printable form from AP GraphicsNet and Access services for graphics and tables (under the file name MoneyIndex) and from PR Newswire for full text/
 /CONTACT: Jordan Goodman of MONEY, 212-522-3618, or Patti Strauss of MONEY Public Relations, 212-522-2695/ CO: ST: IN: SU: ECO


GK -- NY059 -- 8172 05/08/92 15:07 EDT
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Date:May 8, 1992
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