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/CAUTION -- ADVANCE FOR AYEMS MONDAY, NOV. 11/

 /CAUTION -- ADVANCE FOR AYEMS MONDAY, NOV. 11/


MONEY SMALL INVESTOR INDEX: SMALL INVESTORS SCRAMBLE FOR HIGHER YIELDS
 /ADVANCE/ NEW YORK, Nov. 10 /PRNewswire/ -- As the yields on money- market funds and certificates of deposit plunged in recent weeks to less than 5 percent in some cases, investors have continued to switch to riskier investments that pay more, according to data gathered for MONEY magazine's Small Investor Index.
 Experts say that the Federal Reserve's decision last week to cut the discount rate from 5 percent to 4.5 percent could drive down money fund yields to 4.5 percent by the end of the year.
 Rate declines have sent many investors scrambling for higher yields that are not overly risky. Short-term bond funds, which have average maturities of up to five years, have been one popular alternative. For example, T. Rowe Price's $372 million Short-Term Bond Fund, yielding 7.06 percent, brought in $32 million in October and $4 million in the first four days of November.
 A newer type of fund has been even hotter. Adjustable rate mortgage funds, created four years ago, buy government-backed mortgages that reset their interest rates every few months. There are now about 15 such funds with total assets exceeding $5 billion. In the two months since the Benham Group launched its Adjustable Rate Government Securities Fund, which yields 7.3 percent, investors have ploughed $175 million into it.
 Most investment advisers think these two types of funds are suitable for conservative small investors because the funds' prices are not very volatile. But experts warn against reaching for the even higher yields offered by long-term bond funds, because those funds could be three or four times riskier.
 Last week, the Small Investor Index, which tracks the typical individual's holdings, rose $109 to a record $46,804. Stocks gained $65, while bonds added $33. CDs and money funds contributed $19.
 This Last Year % Change from a
 Week Week Ago Week Ago Year Ago
 113.55 113.29 96.92 +0.50% +17.17%
 Latest Changes for Each Asset
 % Change from a
 Category Index Week Ago Year Ago
 Stocks:
 NYSE 123.36 +0.50% +32.27%
 ASE/OTC 146.96 +0.42 +62.11
 Equity funds 125.25 +0.28 +33.19
 Bonds:
 Taxable Bonds 110.78 +0.26 +14.00
 Municipals 110.45 +0.38 +10.93
 Bond funds 113.69 +0.21 +15.79
 Short-term assets:
 CDs 105.45 +0.10 +6.48
 Cash 104.53 +0.09 +5.34
 Other:
 Real estate 101.46 +0.06 +2.12
 Gold 95.33 -2.90 -7.20
 Dec. 28, 1990 equals 100
 Where Average Small Investors Have Their Money Now
 Current Year Ago Current Year Ago
 NYSE 20.17% 19.13% Bond funds 4.86% 4.12%
 ASE/OTC 6.37 6.04 CDs 19.60 21.90
 Equity funds 4.49 3.50 Cash 22.24 21.99
 Taxable bonds 16.58 17.23 Real estate 0.78 0.78
 Municipals 4.36 4.72 Gold 0.55 0.60
 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- 11/11/91
 /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 -- NY046 -- 2667 11/08/91 15:26 EST
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Copyright 1991 Gale, Cengage Learning. All rights reserved.

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Date:Nov 8, 1991
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