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MONEY SMALL INVESTOR INDEX: SMALL INVESTORS FLEE JUNK BONDS FOR CASH

MONEY SMALL INVESTOR INDEX: SMALL INVESTORS FLEE JUNK BONDS FOR CASH
 /ADVANCE/ NEW YORK, Oct. 25 /PRNewswire/ -- Spooked by losses of as much as 3 percent in junk bond mutual funds in the past three weeks, small investors are abandoning those high-risk investments for safe money-market funds, according to data gathered for Money magazine's Small Investor Index.
 From January through September, individuals added $6.5 billion to junk bond funds and earned an average 16 percent total return. But when the funds began losing money in early October, shareholders withdrew $827 million -- the most since August 1990 -- according to AMG Data Services of Arcata, Calif.
 For instance, Vanguard's High Yield Portfolio, with assets of $1.8 billion and a 9.9 percent yield, has suffered a net outflow of $500 million so far this month, compared with a $48 million inflow in September. Almost half of the withdrawals have gone into Vanguard's Prime Portfolio money fund, yielding 3 percent, while $115 million has flowed into the Municipal Money Market Portfolio, paying a tax-free 2.5 percent.
 The losses that triggered the flight from junk funds started when Marriott Corp. announced on Oct. 5 that it was splitting in two and loading the bulk of its debt onto the part of the company that had issued most of its junk bonds. Those bonds quickly fell by as much as 30 percent, depressing the prices of many other high-yield issues.
 "The recent losses remind investors that junk bond funds have significant risks," says Edward Mally, a director of high-yield research at Salomon Bros. "But at current yields of about 10 percent, you are being well rewarded for taking those risks."
 Last week, the typical individual's portfolio, as tracked by the Index, rose $206 to $46,593. Stocks earned $277, while bonds lost $91. CDs and money funds chipped in $11, gold added $5 and real estate rose $4.
 This Last Year % Change from a
 Week Week Ago Week Ago Year Ago
 104.48 104.02 96.90 +0.44% +7.82%
 Latest Changes for Each Asset
 % Change from a
 Category Index Week Ago Year Ago
 Stocks:
 NYSE 104.95 +1.31% +11.07%
 ASE/OTC 106.76 +3.19 +12.93
 Equity funds 104.19 +1.51 +8.76
 Bonds:
 Taxable bonds 106.37 -0.67 +10.89
 Municipals 105.60 -1.15 +9.12
 Bond funds 105.54 -0.62 +9.08
 Cash:
 CDs 103.50 +0.07 +4.42
 Money funds 102.80 +0.05 +3.60
 Other:
 Real estate 94.08 +1.00 -7.76
 Gold 88.62 +2.16 -15.35
 Dec. 27, 1991 equals 100
 Where Average Small Investors Have Their Money Now
 Current Year Ago Current Year Ago
 NYSE 21.98% 23.11% Bond funds 6.25% 4.95%
 ASE/OTC 6.94 7.30 CDs 14.96 18.03
 Equity funds 5.85 4.62 Money funds 24.63 22.01
 Taxable bonds 10.74 11.26 Real estate 0.79 0.76
 Municipals 7.37 7.39 Gold 0.50 0.57
 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- 10/26/92
 /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 Straus of MONEY public relations, 212-522-2695/ CO: ST: IN: SU: ECO


GK -- NY055 -- 4232 10/23/92 14:17 EDT
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Date:Oct 23, 1992
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