Printer Friendly

MONEY SMALL INVESTOR INDEX: INVESTORS FLOCK TO SINGLE-STATE MUNIS

 MONEY SMALL INVESTOR INDEX: INVESTORS FLOCK TO SINGLE-STATE MUNIS
 /ADVANCE/ NEW YORK, March 8 /PRNewswire/ -- Attracted by tax-free yields of more than 6 percent, small investors are flocking to mutual funds that invest exclusively in the municipal bonds of a single state, according to data gathered for MONEY magazine's Small Investor Index.
 In 1991, such funds were the second most popular fixed-income fund category, attracting net investments of $13.2 billion -- or 71 percent more than the year before. Only bond funds that invest in Treasuries and other government securities took in more money. Such funds had net sales of $13.9 billion, compared with net redemptions of $4.2 billion in 1990.
 Moreover, so far this year, cash flows into single-state muni funds have accelerated. For instance, sales of Putnam's California Tax-Exempt Income Fund, with assets of $2.5 billion and a 6.3 percent yield, leaped to $80 million for the first two months of 1992, from $34 million for the same period in 1991. Sales of Franklin's $3.4 billion New York Tax-Free Income Fund, yielding 6.6 percent, have soared 50 percent above 1991's pace.
 Although tax-exempts offer attractive after-tax returns -- equivalent to taxable yields of 10 percent to 11 percent in high-tax states such as New York or California -- analysts caution investors against stashing too much money in single-state funds. "People should not invest more than 25 percent of their bondholdings in a single-state fund, because it is subject to the risk of downgrades if the state runs into economic distress," says Christine Carter Lynch, editor of the Lynch Municipal Bond Advisory in Santa Fe, N.M.
 Last week, the Small Investor Index, which tracks the typical individual's holdings, fell $284 to $45,239. Stocks lost $255, while bonds dropped $38. Certificates of deposit and money funds contributed $14.
 This Last Year % Change from a
 Week Week Ago Week Ago Year Ago
 101.36 102.00 92.01 -0.62% +10.16%
 Latest Changes for Each Asset
 % Change from a
 Category Index Week Ago Year Ago
 Stocks:
 NYSE 100.99 -1.70% +11.58%
 ASE/OTC 111.21 -1.89 +30.68
 Equity funds 104.37 -1.42 +15.04
 Bonds:
 Taxable bonds 98.89 -0.56 +11.03
 Municipals 100.46 -0.05 +9.53
 Bond funds 99.97 -0.13 +12.69
 Short-term assets:
 CDs 100.84 +0.08 +5.70
 Cash 100.76 +0.07 +4.83
 Other:
 Real estate 98.46 -0.44 -4.45
 Gold 97.27 -1.43 -3.61
 Dec. 27, 1991 equals 100
 Where Average Small Investors Have Their Money Now
 Current Year Ago Current Year Ago
 NYSE 21.30% 21.69% Bond funds 5.22% 4.17%
 ASE/OTC 6.73 6.85 CDs 16.79 19.72
 Equity funds 5.08 3.98 Cash 23.09 21.53
 Taxable bonds 12.96 13.17 Real estate 0.78 0.76
 Municipals 7.52 7.59 Gold 0.53 0.54
 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- 3/9/92
 /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 -- NY044 -- 5951 03/06/92 15:25 EST
COPYRIGHT 1992 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Mar 6, 1992
Words:604
Previous Article:POLARIS ANNOUNCES PROFIT SHARING AND CASH DISTRIBUTIONS TOTALING MORE THAN $6,000,000
Next Article:WATSON PHARMACEUTICALS ANNOUNCES FILING OF REGISTRATION STATEMENT FOR INITIAL PUBLIC OFFERING
Topics:


Related Articles
MONEY SMALL INVESTOR INDEX: INVESTORS CHOOSE 9.5% YIELDS OF FOREIGN BONDS
MONEY SMALL INVESTOR INDEX: SMALL INVESTORS SHUN GOLD
MONEY SMALL INVESTOR: INVESTORS PULL $65 BILLION OUT OF CDS STOCKS AND BONDS
AS THE DOW WOWS, INVESTORS GO FOR GROWTH
INVESTORS FLOCK TO DEFENSIVE FUNDS
MONEY SMALL INVESTOR INDEX: INVESTORS GRAB 8 PERCENT GINNIE MAES
MONEY SMALL INVESTOR INDEX: MUNI REDEMPTIONS COST INVESTORS $600 MILLION
MONEY SMALL INVESTOR INDEX: INVESTORS FLOCK INTO MUNI FUNDS
MONEY SMALL INVESTOR INDEX: TAX BILL SENDS INVESTORS RUNNING FOR MUNIS
MONEY SMALL INVESTOR INDEX: INVESTORS SEEK SHELTER FROM RISING RATES

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters