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MONEY SMALL INVESTOR INDEX: INVESTORS TAKE PROFITS ON BONDS

 /ADVANCE/ NEW YORK, Sept. 12 /PRNewswire/ -- As yields on 30-year Treasury bonds dipped below 6 percent last week -- touching an all-time low of 5.85 percent -- many small investors began to cash in their gains by pulling money out of risky bond mutual funds, according to data gathered for Money magazine's Small Investor Index.
 With falling rates sending bond prices to 20-year highs, the withdrawals came mostly from funds holding long-term issues and high- yield junk bonds. For example, the Kemper U.S. Government Securities Fund, which pays 6.7 percent and holds $6.9 billion in bonds, has had net redemptions of $15 million so far in September, on top of $53 million in August. Similarly, shareholders of T. Rowe Price's $1.7 billion High-Yield Fund, paying 9 percent, withdrew $50 million in August and $60 million in the first eight days of September.
 As an alternative, income investors have been putting money into bond funds that will be hurt less if long-term U.S. interest rates rise. Among their choices are short- and intermediate-term U.S. bond funds and foreign bond funds. For instance, Fidelity's Spartan Short-Term Bond fund, yielding 5.6 percent, took in $32 million in September, while the Kemper Global Income fund, paying 7.3 percent, has attracted $16 million since Aug. 1.
 Bond analysts think that small investors are smart to limit their risks. "This is a time to take some of the big profits on long-term bonds," says Roger Early, senior fixed-income portfolio manager at the Federated funds in Pittsburgh. "Current yields don't justify the risks."
 Last week, the Money Small Investor Index, which tracks individuals' holdings, fell $113 to $47,675. Stocks lost $155, while bonds returned $60. CDs and money funds added $9, and gold plummeted $28.
 This Last Year % Change from a
 Week Week Ago Week Ago Year Ago
 106.28 106.53 97.18 -0.24% +9.36%
 Latest Changes for Each Asset
 % Change from a
 Category Index Week Ago Year Ago
 Stocks:
 NYSE 107.09 -0.76% +12.09%
 ASE/OTC 108.98 -1.46 +26.92
 Equity funds 109.13 -0.80 +15.63
 Bonds:
 Taxable bonds 109.86 +0.26 +10.19
 Municipals 111.06 +1.24 +11.96
 Bond funds 109.40 +0.14 +9.13
 Cash:
 CDs 102.45 +0.06 +3.60
 Money funds 101.72 +0.05 +2.55
 Other:
 Real estate 98.40 +0.07 -1.63
 Gold 136.48 -8.46 +28.01
 Jan. 1, 1993 equals 100
 Where Average Small Investors Have Their Money Now
 Current Year Ago Current Year Ago
 NYSE 21.28% 21.43% Bond funds 7.69% 6.61%
 ASE/OTC 6.72 6.77 CDs 13.22 15.73
 Equity funds 8.07 5.96 Money funds 24.43 24.67
 Taxable bonds 9.74 9.80 Real estate 0.91 0.80
 Municipals 7.29 7.73 Gold 0.65 0.51
 Sources: Bank Rate Monitor, the Federal Reserve, Investment Company Institute, Lehman Bros., Lipper Analytical Services, Merrill Lynch, Money Fund Report, Morgan Stanley Capital International, National Association of Real Estate Investment Trusts, Prudential Asset Management, Standard & Poor's, Robert Stanger & Co., World Gold Council.
 -0- 9/13/93
 /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 Straus of MONEY public relations, 212-522-2695/


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GK -- NY052 -- 0825 09/10/93 14:57 EDT
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Publication:PR Newswire
Date:Sep 10, 1993
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