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MONEY SMALL INVESTOR INDEX: SMALL INVESTORS PILE INTO EUROPE

 /ADVANCE/ NEW YORK, Aug. 8 /PRNewswire/ -- Sensing opportunity in Europe's latest currency crisis, U.S. small investors are continuing to pour millions of dollars into mutual funds that invest abroad, according to data gathered for Money magazine's Small Investor Index. Last week, as Europe's finance ministers dramatically loosened the ties between most continental currencies and the German mark, U.S. investors directed $966 million to international stock and bond funds, accelerating a year-long trend. They were quickly rewarded: International stock funds jumped 2.4 percent for the week, and global bond funds climbed 1 percent.
 Analysts attribute the flood of cash partly to small investors' expectation that European interest rates will fall in the aftermath of the currency turmoil. After a similar exchange-rate upheaval last September, Britain's finance minister allowed the value of the pound to fall. The result: British interest rates declined, lifting stock and bond prices.
 Gary Kreps, head of fixed-income investing for G.T. Global, predicts that rates will drop across the continent this time. "Countries like France and the United Kingdom have hit 30-year inflation lows, and yet interest rates are still high," he says. "As they come down, bond and equity prices will move higher."
 Small investors seem to have got the message. Mutual fund giant Fidelity, for example, reports that its 10 international funds averaged 250 new accounts a day in July, up from 50 a day in March; the funds took in a net $210 million in July, vs. $37 million in March.
 Last week, the Small Investor Index, which tracks the typical individual's holdings, rose $35 to a record $46,911. Stocks gained $20, while bonds returned $29. A sell-off in gold cost small investors $21.
 This Last Year % Change from a
 Week Week Ago Week Ago Year Ago
 104.58 104.51 96.60 +0.08% +8.26%
 Latest Changes for Each Asset
 % Change from a
 Category Index Week Ago Year Ago
 Stocks:
 NYSE 104.55 -0.38% +9.65%
 ASE/OTC 105.69 +1.17 +24.65
 Equity funds 106.40 +0.56 +13.07
 Bonds:
 Taxable bonds 107.43 +0.12 +9.70
 Municipals 106.48 +0.31 +8.60
 Bond funds 107.38 +0.36 +8.65
 Cash
 CDs 102.12 +0.07 +3.64
 Money funds 101.48 +0.05 +2.60
 Other:
 Real estate 98.19 -0.31 -3.03
 Gold 155.31 -6.21 +37.89
 Jan. 1, 1993 equals 100
 Where Average Small Investors Have Their Money Now
 Current Year Ago Current Year Ago
 NYSE 21.34% 21.48% Bond funds 7.54% 6.46%
 ASE/OTC 6.74 6.78 CDs 13.38 15.97
 Equity funds 7.89 5.86 Money funds 24.46 24.54
 Taxable bonds 9.77 9.82 Real estate 0.87 0.80
 Municipals 7.31 7.75 Gold 0.70 0.54
 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- 8/9/93
 /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 -- NY045 -- 0363 08/06/93 14:38 EDT
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Date:Aug 6, 1993
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