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/REPEATING FROM FRIDAY, JUNE 4/

MONEY SMALL INVESTOR INDEX: TAX BILL SENDS INVESTORS RUNNING FOR MUNIS
 NEW YORK, June 7 /PRNewswire/ -- Faced by the growing likelihood that Congress will pass President Clinton's tax hikes, small investors have been rushing into mutual funds that hold tax-free municipal bonds and pay the equivalent of 6 percent-plus taxable yields, according to Money magazine's Small Investor Index.
 Since May 27, when the House of Representatives narrowly passed the tax bill, which raises marginal rates from 31 percent to as much as 40.8 percent, small investors have swamped tax-exempt funds. For example, Fidelity Investments in Boston reports that its tax-free funds took in $57 million of new money in the first three days of June, compared with $40 million in the last week of May and only $77 million in the previous three weeks.
 Higher tax rates would make tax-free income even more valuable. For example, a top-quality muni with a seven-year maturity currently yields 4.5 percent. An investor now in the 31 percent tax bracket would have to find a taxable bond paying 6.6 percent to get the same after-tax return. If tax rates rise as proposed, an investor in the 36 percent bracket would get the equivalent of a 7 percent taxable yield.
 Bond analysts think that investors are smart to be going into munis. "As tax rates rise, demand for tax-free bonds will continue to surge, which would boost prices," says James Lynch, editor of the Lynch Municipal Bond Advisory Letter in New York City. He recommends that investors guard against the risk of rising interest rates by sticking with top-quality bonds that have maturities of seven years or less.
 Last week, the Money Small Investor Index, which tracks the typical individual's holdings, rose $138 to a record $48,115. Stocks gained $22, while bonds returned $112. CDs and money-market funds contributed $10 and gold lost $6.
 This Last Year % Change from a
 Week Week Ago Week Ago Year Ago
 104.05 103.75 95.05 +0.29% +9.47%
 Latest Changes for Each Asset
 % Change from a
 Category Index Week Ago Year Ago
 Stocks:
 NYSE 105.16 +0.09% +12.72%
 ASE/OTC 104.32 +0.23 +20.05
 Equity funds 105.49 +0.11 +11.94
 Bonds:
 Taxable bonds 105.35 +0.52 +11.63
 Municipals 106.86 +1.95 +13.65
 Bond funds 105.47 +0.62 +10.28
 Cash:
 CDs 101.51 +0.07 +3.77
 Money funds 101.06 +0.05 +2.73
 Other:
 Real estate 101.34 +0.06 -1.97
 Gold 146.62 -1.94 +31.98
 Jan. 1, 1993 equals 100
 Where Average Small Investors Have Their Money Now
 Current Year Ago Current Year Ago
 NYSE 23.29% 22.36% Bond funds 7.02% 5.97%
 ASE/OTC 7.35 7.06 CDs 13.27 16.31
 Equity funds 7.10 5.56 Money funds 23.82 24.02
 Taxable bonds 9.44 10.02 Real estate 0.82 0.78
 Municipals 7.25 7.38 Gold 0.64 0.53
 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- 6/7/93
 /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 -- NY001B -- 5906 06/07/93 09:54 EDT
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Date:Jun 7, 1993
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