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MONEY SMALL INVESTOR INDEX: SMALL INVESTORS REACH FOR 9% YIELDS

 /ADVANCE/ NEW YORK, July 18 /PRNewswire/ -- As interest rates fell to 16-year lows last week, sending bond prices soaring, small investors shoveled billions of dollars into bond mutual funds that pay as much as 9 percent a year, according to data gathered for Money magazine's Small Investor Index.
 Over the past two years, long-term bond prices have rocketed 26 percent as yields on Treasury issues have fallen from 8.5 percent to 6.6 percent. Indeed, since June 1, bond prices have risen 2 percent.
 As a result, individuals have added $12.1 billion to bond funds in the past six weeks, compared with $9 billion in the previous six week period. For example, since June 1, T. Rowe Price's top-selling High Yield Fund, which holds bonds worth $1.8 billion and yields 8.9 percent, has attracted a net $84 million, vs. $63 million in the previous six weeks.
 Similarly, Vanguard's best-selling bond fund, $3.2 billion Short Term Corporate Portfolio, which yields 4.9 percent, has taken in a net $137 million since June 1, almost double the $70 million it brought in over the previous six weeks. Moreover, in the first two weeks of July, the Vanguard fund's inflows rose to $50 million, vs. $21 million for the comparable June period.
 Experts say that high-quality short-term funds are fairly safe, but they advise investors to think twice about riskier high-yield bond funds. "You have to worry about the credit risks of the companies issuing the bonds on top of the risk of interest rates rising," says Hugh Johnson, chief investment officer at First Albany.
 Last week, the Money Small Investor Index, which tracks the typical individual's holdings, rose $120 to $46,800. Stocks gained $62, while bonds returned $53. Certificates of deposit and money-market funds contributed $9.
 This Last Year % Change from a
 Week Week Ago Week Ago Year Ago
 104.34 104.25 96.18 +0.26% +8.48%
 Latest Changes for Each Asset
 % Change from a
 Category Index Week Ago Year Ago
 Stocks:
 NYSE 104.66 +0.15% +10.68%
 ASE/OTC 104.69 +0.93 +23.00
 Equity funds 105.51 +0.49 +12.50
 Bonds:
 Taxable bonds 107.35 +0.40 +10.60
 Municipals 107.92 +0.73 +10.77
 Bond funds 107.14 +0.30 +9.39
 Cash:
 CDs 101.92 +0.07 +3.67
 Money funds 101.34 +0.05 +2.63
 Other:
 Real estate 102.49 +0.48 +0.74
 Gold 156.89 -2.14 +34.26
 Jan. 1, 1993 equals 100
 Where Average Small Investors Have Their Money Now
 Current Year Ago Current Year Ago
 NYSE 21.37% 21.51% Bond funds 7.33% 6.34%
 ASE/OTC 6.75 6.79 CDs 13.46 16.15
 Equity funds 7.70 5.92 Money funds 24.73 24.34
 Taxable bonds 9.78 9.84 Real estate 0.88 0.79
 Municipals 7.32 7.76 Gold 0.69 0.55
 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- 7/19/93
 /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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Date:Jul 16, 1993
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