Win, lose or draw.[ILLUSTRATION OMITTED] IF YOU'RE you're Contraction of you are. you're you are you're be AMONG THE 38 MILLION PEOPLE WHO own mutual funds, you're probably still relishing the glory of last year's stellar performance. Time and time again, mutual funds proved to be a healthy choice for a well-balanced well-bal·anced adj. 1. Evenly proportioned, balanced, or regulated. 2. Mentally stable; sensible or sound. well-balanced Adjective sensible and emotionally stable Adj. investment portfolio. Experts advise to always allocate To reserve a resource such as memory or disk. See memory allocation. a portion of your savings to funds, regardless of market shifts. Most of you know by now that 1995 was the best of times for stock mutual funds. In fact, it was their best performance since their splendid Splendid was a musical duo featuring Angie Hart and Jesse Tobias, who at the time were also husband and wife. History The duo met in Canada, August 1996, when Australian band Frente!, fronted by Hart, arrived to play over two weeks of support dates for Alanis Morissette's gain of 35% in 1991. Last year, a $1,000 investment in stock mutual funds would have yielded about $300, with equity funds up 36%. Not bad, considering that, in general, the average annual return on mutual funds is 10%. Driven by healthy corporate earnings and declining interest rates, mutual funds kept pace with broad market averages in 1995. In comparison, the Standard & Poor's 500 stock index gained 34% and the Russell Russell, English noble family. It first appeared prominently in the reign of Henry VIII when John Russell, 1st earl of Bedford, 1486?–1555, rose to military and diplomatic importance. 3000, 37%. The rolling good times didn't did·n't Contraction of did not. didn't did not didn't do stop on New Year's Eve. A record $24 billion went into equity mutual funds in January January: see month. alone, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the Investment Co. Institute (ICI (language) ICI - An extensible, interpretated language by Tim Long with syntax similar to C. ICI adds high-level garbage-collected associative data structures, exception handling, sets, regular expressions, and dynamic arrays. ) in Washington Washington, town, England Washington, town (1991 pop. 48,856), Sunderland metropolitan district, NE England. Washington was designated one of the new towns in 1964 to alleviate overpopulation in the Tyneside-Wearside area. . As a result, the market surged 300 points. "Clearly there's a push from mutual funds into the market that is helping to fuel the rally. It's it's 1. Contraction of it is. 2. Contraction of it has. See Usage Note at its. it's it is or it has it's be ~have not the whole thing but it is a piece of it," says Jon JON Jonah JON Jesus of Nazareth JON Job Order Number JON Johnston Island, US, Outlying Islands (Airport Code) Teall, a research coordinator with New York-based Lipper Business Description Lipper, Inc., a subsidiary of Reuters provides mutual and hedge fund information, analytical tools, data and commentary. Lipper's benchmarking provides a guidepost to asset managers, fund companies, financial intermediaries, traditional media, Analytical analytical, analytic pertaining to or emanating from analysis. analytical control control of confounding by analysis of the results of a trial or test. Services, which tracks the performance of mutual funds. "People are wondering if things are too high. The extraordinary rally we've we've Contraction of we have. we've have seen in the last week or two has caused concern. There is a certain amount of excess in this move, but I don't know Don't know (DK, DKed) "Don't know the trade." A Street expression used whenever one party lacks knowledge of a trade or receives conflicting instructions from the other party. how much." The top winners by sector included: health care/biotech funds, with gains of 46%; financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. funds, up 41%; and science/technology funds, up 38%. (The science/technology sector soared for much of 1995 but lost momentum in the fourth quarter.) The technology shake-up Noun 1. shake-up - the imposition of a new organization; organizing differently (often involving extensive and drastic changes); "a committee was appointed to oversee the reorganization of the curriculum"; "top officials were forced out in the cabinet shakeup" left many investors wondering about the state of mutual funds in 1996. After a splendid journey in 1995, prudent financial gurus now caution: Fasten your seat belt, it's going to be a bumpy bump·y adj. bump·i·er, bump·i·est 1. Covered with or full of bumps: a bumpy country road. 2. Marked by bumps and jolts; rough: a bumpy flight. ride. The proposed budget bill could curb the economy. Fewer stocks appear likely to deliver superior returns, and it's projected that fewer industries will excel this year. Not all is lost. Other financial pundits encourage you to still capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. promising funds. Don't don't 1. Contraction of do not. 2. Nonstandard Contraction of does not. n. A statement of what should not be done: a list of the dos and don'ts. be dismayed by market sways, just remember that mutual funds should be viewed as long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. investments, with a five- to 10-year commitment. The goal is to have a mixed investment portfolio as a means for sending your children to college, building a nest egg Nest Egg A special sum of money saved or invested for one specific future purpose. Notes: Examples of the purposes for which nest eggs are usually intended include retirement, education, and even entertainment (vacations and cruises). , buying a home, traveling abroad and, in general, having a lifestyle that suits you and your family. There's more money invested in mutual funds now than ever before; some $2.8 trillion One thousand times one billion, which is 1, followed by 12 zeros, or 10 to the 12th power. See space/time. (mathematics) trillion - In Britain, France, and Germany, 10^18 or a million cubed. In the USA and Canada, 10^12. , according to the ICI. "It's a sign that mutual funds are steadily increasing in popularity. New money coming in also means that assets are appreciating," says Elizabeth Elizabeth, sister of King Louis XVI of France Elizabeth, 1764–94, sister of King Louis XVI of France, known as Madame Elizabeth. Deeply loyal to her brother, she remained in France during the French Revolution, suffered imprisonment, and was Tower, ICI's vice president. Financial experts advise investors to put their money in funds with staying power and diversify diversify To acquire a variety of assets that do not tend to change in value at the same time. To diversify a securities portfolio is to purchase different types of securities in different companies in unrelated industries. their portfolios. Some funds saw a 60% to 70% return in 1995, but that's considered rare. Several analysts agree investors should welcome a 20%, or even 10%, gain in mutual funds this year. THE YEAR AHEAD Last year's industry success stories are expected to do well this year, but don't expect any lofty returns. In 1995, health and biotech bi·o·tech n. Informal Biotechnology. biotech Noun short for biotechnology Noun 1. funds benefited from drug companies that had higher yields. "Drug companies were forced to become better managed companies, which contributed to earnings, due to pressure from President Clinton's health care reform proposal," says Teall. On the other hand, the financial services sector, comprised of banks, insurance companies and brokerage firms, benefited from lower interest rates. "There were also some very large mergers in the banking industry, which pushed stock prices up--so funds that owned those stocks did well," explained Teall. Mirroring the gains made by financial services' stocks is Kemper-Dreman: High Return. The top-performing equity-income fund was up 46% in 1995; the $100 million fund holds 49 stocks. Fund manager David Dreman David Dreman is a noted investor, who founded and is Chairman and Chief Investment Officer of Dreman Value Management, an investment company. The company focuses on the assets of mutual funds, pension, foundation, and endowment funds, as well as high net-worth individuals. has invested 45% of the high-yield Adj. 1. high-yield - yielding a large amount of agricultural or industrial production fruitful - productive or conducive to producing in abundance; "be fruitful and multiply" fund's assets in financial services and 15% in health care. The fund's largest holdings, 12%, are Freddie Mac Freddie Mac: see Federal Home Loan Mortgage Corporation. and Fannie Mae Fannie Mae: see Federal National Mortgage Association. . Other stocks include BancOne, PNC PNC Purdue University North Central (Westville, Indiana) PnC Point 'n Click PNC Police National Computer PNC People's National Congress (Guyana) PNC People's National Congress and Columbia-Gas (up 87% in 1995). "About 10% of our holdings were in technology last year, but we sold them in August just before the downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. ," says Dreman. "We buy industries that are out of favor." [Part 1 of 2]
LARGEST MUTUAL FUNDS IN 1995
FUND NAME TOTAL NET ASSETS 1-YR 3-YR
(in millions) CUMULATIVE
Fidelity Magellan $53,702 36.82% 67.47% Investment Co. 25,678 30.63 46.03 of America Washington Mutual Inv 18,786 41.22 60.48 Vanguard Index:500 17,372 37.45 52.82 Port Fidelity Puritan 15,628 21.46 50.14 Fidelity Contrafund 14,832 36.28 63.62 Fidelity Growth & 14,819 35.38 65.49 Growth Twen Century:Ultra Inv 14,551 37.68 61.64 Income Fund of America 13,778 29.08 43.51 Vanguard Windsor 13,646 30.15 55.12 [Part 2 of 2]
LARGEST MUTUAL FUNDS IN 1995
FUND NAME YEAR TELEPHONE
STARTED NUMBER
Fidelity Magellan 1992 800-544-8888 Investment Co. N/A 800-421-4120 of America Washington Mutual Inv N/A 800-421-4120 Vanguard Index:500 1987 800-662-7447 Port Fidelity Puritan 1987 800-544-8888 Fidelity Contrafund 1990 800-544-8888 Fidelity Growth & 1993 800-544-8888 Growth Twen Century:Ultra Inv N/A 800-345-2021 Income Fund of America N/A 800-421-4120 Vanguard Windsor 1964 800-662-7447 Source: Lipper Analytical Services Inc., New York Pierre Pierre (pēr), city (1990 pop. 12,906), state capital (since 1889) and seat of Hughes co., central S.Dak., on the east bank of the Missouri River, opposite Fort Pierre; inc. 1883. Dunagan, associate vice president at Dean Witter Reynolds Dean Witter Reynolds was an American stock brokerage catering to the middle class. In 1997, it merged with the Morgan Stanley Group to form Morgan Stanley Dean Witter. The amalgamated firm is now known as Morgan Stanley. in Matteson There are several places named Matteson in the United States:
At the same time, the health care/biotech sector will continue to make a strong showing, says Dunagan. "Pharmaceutical stocks have been robust and HMOs are doing fairly well." A word to the wise: Steer clear of a capricious capricious adv., adj. unpredictable and subject to whim, often used to refer to judges and judicial decisions which do not follow the law, logic or proper trial procedure. A semi-polite way of saying a judge is inconsistent or erratic. technology sector. "Individual investors could get beaten up by technology stocks," says Richard Schaffer, principal with Technologic Partners, a New York-based publishing and research firm. "Tech stocks are volatile right now because earnings are so unpredictable. You just don't know how well products are going to sell," he says. "Some companies are trading much too high." In terms of the year-end outlook, Schaffer says technology companies could post impressive gains at the end of 1996 and start of 1997. [Part 1 of 4]
B.E.'s TOP MUTUAL FUNDS
NET
ASSET VALUE
MUTUAL FUND NAME (in millions)
BALANCED Invesco Multiple $13.19 AIM: Balanced Fund; A 19.22 AIM: Balanced Fund; B 19.22 Vanguard Wellington 24.43 Flag Inv Value Bldr; A 13.99 GROWTH Dominion: Insight Growth $15.85 Adv Innr Cir: WhiteOak 17.90 Putnam Voyager II;A 14.40 IDEX Fund 3 16.96 Mairs & Power Growth 56.04 GROWTH & INCOME Baron Growth & Income $15.11 Kemper-Dreman: Contr; A 16.20 PIMCO Inst: NFJ Lw PE; In 11.52 Washington Mutual Inv 21.97 Brinson U.S. Equity 13.17 EQUITY INCOME Kemper-Dreman: HI Ret; A $21.49 Norwest Adv: Inc Eqty; I 25.49 Vanguard Equity Income 16.69 Cowen Income + Growth; C 13.22 Cowen Income + Growth; A 13.19 CAPITAL APPRECIATION FUNDS Alger: Capital Apprec $19.09 Perkins Opportunity Fund 34.81 Bruce Fund 145.52 IDEX II: Agg Growth; A 15.13 IDEX I:Agg Growth; C 15.07 INTERNATIONAL GAM: Int'l; A $21.37 Harbor: Int'l Growth 12.64 Putnam Int'l New Opp; A 10.38 Janus Overseas 12.05 Hotchkis & Wiley: Int'l 19.25 GLOBAL J Hancock Gl Mktplc; A $12.14 GAM: Global; A 13.51 Fortis World: Glbl Gr; A 18.51 Fortis World; Glbl Gr; C 18.38 Fortis World; Glbl; B 18.37 SMALL COMPANY GROWTH Govett: Smaller Co; A $29.96 Turner Small Cap 17.37 Reserve Priv: Emer Growth 16.35 Smith Barney Spec Eqty; A 30.43 Smith Barney Spec Eqty; B 29.76 TAXABLE FIXED INCOME Benham Target: 2020 $26.25 Benham Target: 2015 36.82 GMO: Emerg Country Debt 11.30 Benham Target: 2010 46.86 Smith Barney Invmnt Grd; A 13.27 TAX-EXEMPT FIXED INCOME Fundamental: Calif Muni $8.91 SAFECO CA Tx-Fr Income 12.66 Fundamental: Hi-Yld Muni 7.07 SAFECO Adv: Muni Bd; A 11.78 Alliance Muni II: Fl; A 10.01 [Part 2 of 4]
B.E.'s TOP MUTUAL FUNDS
TOTAL RETURN PERFORMANCE
1-YR 3-YR 5-YR
MUTUAL FUND NAME CUMULATIVE
BALANCED Invesco Multiple 36.46% N/A N/A AIM: Balanced Fund; A 34.98 47.45% 131.10% AIM: Balanced Fund; B 33.93 N/A N/A Vanguard Wellington 32.92 50.15 100.38 Flag Inv Value Bldr; A 32.76 47.83 N/A GROWTH Dominion: Insight Growth 64.60% 85.68% N/A Adv Innr Cir: WhiteOak 52.70 63.25 N/A Putnam Voyager II;A 49.99 N/A N/A IDEX Fund 3 48.62 44.63 134.17% Mairs & Power Growth 47.74 76.13 169.88 GROWTH & INCOME Baron Growth & Income 52.54% N/A N/A Kemper-Dreman: Contr; A 44.57 57.64% 122.05% PIMCO Inst: NFJ Lw PE; In 41.29 57.77 N/A Washington Mutual Inv 41.22 60.48 116.25 Brinson U.S. Equity 40.58 N/A N/A EQUITY INCOME Kemper-Dreman: HI Ret; A 46.86% 58.82% 180.77% Norwest Adv: Inc Eqty; I 38.43 N/A N/A Vanguard Equity Income 37.34 54.95 112.12 Cowen Income + Growth; C 37.20 N/A N/A Cowen Income + Growth; A 36.77 39.99 98.77 CAPITAL APPRECIATION FUNDS Alger: Capital Apprec 78.57% N/A N/A Perkins Opportunity Fund 70.35 N/A N/A Bruce Fund 64.77 65.15% 85.30% IDEX II: Agg Growth; A 54.94 N/A N/A IDEX I:Agg Growth; C 54.52 N/A N/A INTERNATIONAL GAM: Int'l; A 30.09% 110.18% 150.37% Harbor: Int'l Growth 24.29 N/A N/A Putnam Int'l New Opp; A 22.29 N/A N/A Janus Overseas 22.05 N/A N/A Hotchkis & Wiley: Int'l 19.88 69.60 98.67 GLOBAL J Hancock Gl Mktplc; A 40.02% N/A N/A GAM: Global; A 36.25 100.25% 111.21% Fortis World: Glbl Gr; A 31.56 50.49 N/A Fortis World; Glbl Gr; C 30.73 N/A N/A Fortis World; Glbl; B 30.65 N/A N/A SMALL COMPANY GROWTH Govett: Smaller Co; A 68.99% 244.83% N/A Turner Small Cap 68.16 N/A N/A Reserve Priv: Emer Growth 67.46 N/A N/A Smith Barney Spec Eqty; A 63.38 105.01 N/A Smith Barney Spec Eqty; B 62.25 100.62 216.82% TAXABLE FIXED INCOME Benham Target: 2020 61.34% 80.16% 129.06% Benham Target: 2015 52.72 71.26 126.03 GMO: Emerg Country Debt 45.11 N/A N/A Benham Target: 2010 42.09 58.69 110.89 Smith Barney Invmnt Grd; A 35.52 46.20 N/A TAX-EXEMPT FIXED INCOME Fundamental: Calif Muni 32.00% 23.50% 43.94% SAFECO CA Tx-Fr Income 26.14 29.69 57.65 Fundamental: Hi-Yld Muni 25.68 15.01 34.62 SAFECO Adv: Muni Bd; A 24.60 N/A N/A Alliance Muni II: Fl; A 24.37 N/A N/A [Part 3 of 4]
B.E.'s TOP MUTUAL FUNDS
EXPENSE ANALYSIS
MIN MAX. TOTAL
INITIAL SALES EXPENSE
MUTUAL FUND NAME INV. CHARGE RATIO
BALANCED Invesco Multiple $1,000 0.00% 1.25% AIM: Balanced Fund; A 500 4.75 1.25 AIM: Balanced Fund; B 500 0.00 1.98 Vanguard Wellington 3,000 0.00 0.35 Flag Inv Value Bldr; A 2,000 4.50 1.35 GROWTH Dominion: Insight Growth $5,000 3.50% 2.38% Adv Innr Cir: WhiteOak 25,000 0.00 0.97 Putnam Voyager II;A 500 5.75 0.92 IDEX Fund 3 500 8.50 1.25 Mairs & Power Growth 1,000 0.00 0.99 GROWTH & INCOME Baron Growth & Income $2,000 0.00% N/A Kemper-Dreman: Contr; A 1,000 5.75 1.25% PIMCO Inst: NFJ Lw PE; In 200,000 0.00 0.70 Washington Mutual Inv 250 5.75 0.69 Brinson U.S. Equity 100,000 0.00 0.80 EQUITY INCOME Kemper-Dreman: HI Ret; A $1,000 5.75% 1.25% Norwest Adv: Inc Eqty; I None 0.00 N/A Vanguard Equity Income 3,000 0.00 0.43 Cowen Income + Growth; C 1,000 0.00 N/A Cowen Income + Growth; A 1,000 4.75 1.26 CAPITAL APPRECIATION FUNDS Alger: Capital Apprec None 0.00% 5.53% Perkins Opportunity Fund $2,500 4.75 2.63 Bruce Fund 1,000 0.00 2.04 IDEX II: Agg Growth; A 500 5.50 N/A IDEX I:Agg Growth; C 500 0.00 N/A INTERNATIONAL GAM: Int'l; A $10,000 5.00% 1.60% Harbor: Int'l Growth 2,000 0.00 1.32 Putnam Int'l New Opp; A 500 5.75 N/A Janus Overseas 1,000 0.00 2.16 Hotchkis & Wiley: Int'l 5,000 0.00 1.00 GLOBAL J Hancock Gl Mktplc; A $1,000 5.00% N/A GAM: Global; A 10,000 5.00 2.29% Fortis World: Glbl Gr; A 500 4.75 1.72 Fortis World; Glbl Gr; C 500 0.00 N/A Fortis World; Glbl; B 500 0.00 N/A SMALL COMPANY GROWTH Govett: Smaller Co; A $500 4.95% 1.95% Turner Small Cap 100,000 0.00 1.09 Reserve Priv: Emer Growth 1,000 4.50 1.75 Smith Barney Spec Eqty; A 1,000 5.00 1.49 Smith Barney Spec Eqty; B 1,000 0.00 2.21 TAXABLE FIXED INCOME Benham Target: 2020 $1,000 0.00% 0.70% Benham Target: 2015 1,000 0.00 0.63 GMO: Emerg Country Debt 1,000,000 0.00 0.50 Benham Target: 2010 1,000 0.00 0.66 Smith Barney Invmnt Grd; A 1,000 4.50 1.11 TAX-EXEMPT FIXED INCOME Fundamental: Calif Muni $1,000 0.00% 3.48% SAFECO CA Tx-Fr Income 1,000 0.00 0.70 Fundamental: Hi-Yld Muni 1,000 0.00 2.50 SAFECO Adv: Muni Bd; A 1,000 4.75 N/A Alliance Muni II: Fl; A 250 4.25 0.38 [Part 4 of 4]
B.E.'s TOP MUTUAL FUNDS
5-YR
INVESTMENT
TOTAL TELEPHONE
MUTUAL FUND NAME PER $1,000 NUMBER
BALANCED Invesco Multiple N/A 800-525-8085 AIM: Balanced Fund; A $2,311 800-347-1919 AIM: Balanced Fund; B N/A 800-347-1919 Vanguard Wellington 2,004 800-662-7447 Flag Inv Value Bldr; A N/A 800-767-3524 GROWTH Dominion: Insight Growth N/A 800-880-1095 Adv Innr Cir: WhiteOak N/A 800-932-7781 Putnam Voyager II;A N/A 800-225-1581 IDEX Fund 3 $2,342 800-851-9777 Mairs & Power Growth 2,699 612-222-8478 GROWTH & INCOME Baron Growth & Income N/A 800-992-2766 Kemper-Dreman: Contr; A $2,221 800-621-1048 PIMCO Inst: NFJ Lw PE; In N/A 800-800-7674 Washington Mutual Inv 2,163 800-421-4120 Brinson U.S. Equity N/A 800-448-2430 EQUITY INCOME Kemper-Dreman: HI Ret; A $2,808 800-621-1048 Norwest Adv: Inc Eqty; I N/A 800-338-1348 Vanguard Equity Income 2,121 800-662-7447 Cowen Income + Growth; C N/A 800-262-7116 Cowen Income + Growth; A 1,988 800-262-7116 CAPITAL APPRECIATION FUNDS Alger: Capital Apprec N/A 800-992-3863 Perkins Opportunity Fund N/A 800-366-8361 Bruce Fund $1,853 800-872-7823 IDEX II: Agg Growth; A N/A 800-851-9777 IDEX I:Agg Growth; C N/A 800-851-9777 INTERNATIONAL GAM: Int'l; A $2,504 800-426-4685 Harbor: Int'l Growth N/A 800-422-1050 Putnam Int'l New Opp; A N/A 800-225-1581 Janus Overseas N/A 800-525-8983 Hotchkis & Wiley: Int'l 1,987 800-346-7301 GLOBAL J Hancock Gl Mktplc; A N/A 800-225-5291 GAM: Global; A $2,112 800-426-4685 Fortis World: Glbl Gr; A N/A 800-800-2638 Fortis World; Glbl Gr; C N/A 800-800-2638 Fortis World; Glbl; B N/A 800-800-2638 SMALL COMPANY GROWTH Govett: Smaller Co; A N/A 800-421-5666 Turner Small Cap N/A 800-932-7781 Reserve Priv: Emer Growth N/A 800-223-5547 Smith Barney Spec Eqty; A N/A 800-327-6748 Smith Barney Spec Eqty; B $3,168 800-327-6748 TAXABLE FIXED INCOME Benham Target: 2020 $2,291 800-331-8331 Benham Target: 2015 2,260 800-331-8331 GMO: Emerg Country Debt N/A 617-330-7500 Benham Target: 2010 2,109 800-331-8331 Smith Barney Invmnt Grd; A N/A 800-327-6748 TAX-EXEMPT FIXED INCOME Fundamental: Calif Muni $1,439 800-322-6864 SAFECO CA Tx-Fr Income 1,577 800-426-6730 Fundamental: Hi-Yld Muni 1,346 800-322-6864 SAFECO Adv: Muni Bd; A N/A 800-528-6501 Alliance Muni II: Fl; A N/A 800-227-4618 Source: Lipper Analytical Services, Inc. Alger Capital Appreciation was a top performing stock mutual fund last year, up 78.57%. The fund was heavily weighted in technology stocks at the beginning of 1995. But after the tumble among semiconductor companies, the fund decreased its holdings to about 50%. Biotech and health care stocks account for about 25% of the fund's $68 million assets. "We're looking for Looking for In the context of general equities, this describing a buy interest in which a dealer is asked to offer stock, often involving a capital commitment. Antithesis of in touch with. stocks that can be big winners over the long haul Long distance. Long haul implies traversing a state or a country. Contrast with short haul. , whether it's a small company with an important new product or a company being restructured with new management," says Daniel Perkins, who co-manages the Perkins Opportunity Fund with his father, Richard W. Perkins. The capital appreciation fund was the second best performer in 1995 with gains of 70%. The $76 million fund holds 74 stocks, 20% of which are in technology companies. However, the fund's largest holding is Rainforest Cafe Rainforest Cafe is a themed restaurant chain owned by Landry's Restaurants, Inc. of Houston, Texas. It was founded and created by entrepreneur Steven Schussler. Description , a theme restaurant and retail store chain headquartered in Minneapolis. The stock has quadrupled in value since Perkins bought it in 1995. What other sectors are worth looking into? Consider diversifying in international, natural resources and small company value funds, says John Rekenthaler, publisher of Chicago-based Morningstar Mutual Funds. "Nibble Half a byte (four bits). (data) nibble - /nib'l/ (US "nybble", by analogy with "bite" -> "byte") Half a byte. Since a byte is nearly always eight bits, a nibble is nearly always four bits (and can therefore be represented by one hex digit). on these funds and make sure you have exposure to them in your portfolio, because they may be the leaders in `96," he advises. "These are the sectors that were left behind in the stock rally of the last five years." His contrarian Contrarian An investment style that goes against prevailing market trends by buys assets that are performing poorly and selling when they perform well. Notes: A contrarian investor believes that the people who say the market is going up do so only when they are fully position is for investors to stop pouring so much into growth and income mutual funds. His picks for 1996 are: T. Rowe Price T. Rowe Price (NASDAQ: TROW) is an independent global investment management firm and mutual fund manager based in Baltimore, Maryland. It was founded in 1937 by Thomas Rowe Price, Jr.. T. New Era, Ivy International and the Third Avenue Value Fund. "But don't expect another 30% gain in mutual funds this year," cautions Rekenthaler. "My best guess is that we'll see modest gains of 10%." In January, the Federal Reserve cut interest rates from 5.5% to 5.25%. Teall says the lower rates helped stock prices which, in turn, helped mutual funds. "There's a general feeling that with interest rates that are low, the economy will do better, and if the economy does better, companies do better," he says. "In the short term, the reduction was positive for performance, but for longer-term performance, we remain cautious and are looking for correction." In a symbolic gesture, the Feds also lowered the discount rate and, as a result, the yield on the treasury note dropped 13 basis points from 5% to 4.87%. David Schroeder, fund manager for Benham Target 2020 Fixed-Income, says lower interest rates are good for the bond market. "Since the Fed lowered the rates, the bond market has rallied. We've seen yields of Treasury bonds with short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. maturities decline," he says. "On the other hand, yields of long-term bonds have risen because the U.S. Treasury U.S. Treasury Created in 1798, the United States Department of the Treasury is the government (Cabinet) department responsible for issuing all Treasury bonds, notes and bills. Some of the government branches operating under the U.S. Treasury umbrella include the IRS, U.S. is issuing a lot of securities." Dave Capurro, portfolio manager of the Franklin Short-Intermediate U.S. Government Fund, says one portfolio affected by lowered rates was mortgage securities. "A lot of people are refinancing Refinancing An extension and/or increase in amount of existing debt. , which can affect mortgage returns," he says. "We're still invested in mortgage securities but we might move out of certain Ginnie Mae Ginnie Mae: see Federal National Mortgage Association. coupons that are highly susceptible to refinancing, favoring favoring an animal is said to be favoring a leg when it avoids putting all of its weight on the limb. A part of being lame in a limb. lower coupons that will be less affected by refinancing." A JUMP ON BOND FUNDS The drop in interest rates gave way to double-digit gains, 15%, for taxable bonds--the best performance in five years. While tax-exempt bonds Tax-exempt bond A bond usually issued by municipal, county, or state governments whose interest payments are not subject to federal and, in some cases, state and local income tax. tax-exempt bond See municipal bond. were up 16.38%, the fear that Congress could restructure the tax system is adversely affecting these securities. Speculation, however, has lowered the price of bond funds. Right now, tax-exempt bonds are cheap, up 32%, says Lance Brofman, manager of the Fundamental California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). Muni Fund. The $18 million fund holds 52 bonds; its largest holding, the Bakersfield Escrow escrow Instrument, such as a deed, money, or property, that constitutes evidence of obligations between two or more parties and is held by a third party. It is delivered by the third party only upon fulfillment of some condition. to Maturity Bond, has a triple-A rating from Standard & Poor's. Other holdings include Foothills Transportation Corridor and the Madera, Calif., Unified School District A unified school district is a school district which includes both primary school (kindergarten through middle school or junior high) and high school (grades 9-12). In Illinois, these districts are called unit school districts. . Tax-exempt bond funds are heavily weighted in Treasuries, which makes them a good investment, says Brofman, who remains optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about municipal bonds. Investors seeking the best of both worlds have long courted balanced funds Balanced Fund A mutual fund that invests its assets into the money market, bonds, preferred stock, and common stock with the intention to provide both growth and income. Also known as an asset allocation fund. . Normally, balanced funds can have no more than 70% invested in equities, with the remaining portion in either cash or investment-grade bonds Investment-grade bonds A bond that is assigned a rating in the top four categories by commercial credit rating companies. S&P classifies investment-grade bonds as BBB or higher, and Moody's classifies investment grade bonds as BAA or higher. Related: High-yield bond. . What's attractive about these funds for conservative investors is that they generally offer safety of principal, regular income and modest growth. This year's top winner was Invesco Multiple, up 36.46% (year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. ). The $105 million fund has heavy investments in agricultural and agricultural chemical companies. "I think that this sector of the U.S. economy has a bright future ahead of it," says Fund Manager Brian Kelly Brian Kelly may refer to:
Kelly looks for earnings growth, revenue growth and value based on historical criteria. Invesco is 54% invested in equities with 39 stocks, including U.S. West and Agrium. The fund's largest holding (roughly 5%) is Agrium, a Canadian-based fertilizer fertilizer, organic or inorganic material containing one or more of the nutrients—mainly nitrogen, phosphorus, and potassium, and other essential elements required for plant growth. company that has doubled in value since Kelly bought it last year. The fact that 1996 is an election year is bound to affect the market and consequently bonds and stock mutual funds. "The market likes Republicans," says Cheryl Broussard, principal of Broussard & Douglas, an investment company in Palo Alto Palo Alto, city, California Palo Alto (păl`ō ăl`tō), city (1990 pop. 55,900), Santa Clara co., W Calif.; inc. 1894. Although primarily residential, Palo Alto has aerospace, electronics, and advanced research industries. , Calif. "Don't panic
Don't panic may refer to:
A GUIDE TO B.E.'S LIST BE's annual top mutual fund list showcases the best mutual funds from a pool of 5,800 funds. The objective ranking, provided by Lipper Analytical Services, is based on each fund's five-year total return compared with similar funds. We show total returns for one-, three- and five-year periods to give readers a perspective on past performance. [ILLUSTRATION OMITTED] The funds are listed under 10 separate categories to reflect a fund's investment objective (i.e., balanced, international, growth and income). The net asset value is the total value of all securities held by the fund divided by the number of outstanding shares. To indicate how much it will cost you to own a mutual fund, we've listed the initial minimum investment, the maximum sales charge Sales Charge A commission or fee paid by an investor at the time of purchasing mutual fund shares. The charge is paid to a mutual fund salesperson or financial advisor and is intended to provide compensation for the financial salesperson's efforts in assisting their client select and the total expense ratio. The sales fee, or load, is listed as a percentage; it can be as much as 5.75% of the amount you're investing. Some funds are no-load, or no fee, while others require lower fees that range anywhere between 1% and 4%. Next to each fund we also show what would be the value of $1,000 invested five years ago. You can amass a comfortable nest egg through the power of compounding interest and dollar cost averaging (putting aside a set amount faithfully). There are two families of funds that are black-owned and -managed. However, they did not make our list. Ariel Capital Management, based in Chicago, manages three funds. Ariel Appreciation is a $139 million fund with year-end gains of 24%. Its sister fund, Ariel Growth, which has assets of $122 million, was up 18%. Last October, Ariel launched the Ariel Premier Bond Fund, a $2.5 million fund that posted gains of 3.51%. The Brown Capital Management Group, in Baltimore Baltimore, city (1990 pop. 736,014), N central Md., surrounded by but politically independent of Baltimore co., on the Patapsco River estuary, an arm of Chesapeake Bay; inc. 1745. , also manages three funds: The Brown Capital Management Balanced Fund, with $3 million in assets, posted gains of 29%. Brown Capital Management Equity Fund, a $1.6 million fund, had gains of 32%; and the Brown Capital Management Small Company Fund, $3.2 million in assets, was up 34%. If you're interested in any of the funds on our chart, call the number listed and ask for a prospectus. It will outline the fund's investment objective, management fees, shareholder services and past performances. |
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