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MONEY SMALL INVESTOR INDEX: SMALL INVESTORS RUSH TO INDEX FUNDS

 MONEY SMALL INVESTOR INDEX: SMALL INVESTORS RUSH TO INDEX FUNDS
 /ADVANCE/ NEW YORK, Dec. 15 /PRNewswire/ -- For more than a year, Americans have been pouring billions of dollars into index funds -- portfolios of stocks that match the performance of such well-known averages as Standard & Poor's 500 -- according to data gathered for MONEY magazine's Small Investor Index.
 Major mutual fund companies now offer about 15 different index funds, and new ones are launched regularly. Last week, for example, Dreyfus unveiled its Edison Electric Institute Fund, patterned after the index that tracks electric utility shares.
 Index funds offer two big attractions. First, the funds simply match the stock averages, which around 30% of investment managers fail to do consistently. And management fees at index funds are only about 15 percent of those of managed funds.
 Altogether, index funds have amassed assets of more than $9 billion, up from less than $1 billion 10 years ago. Since Jan. 1, in fact, Vanguard's Index Trust: 500 Portfolio, which has returned 17% so far this year, has mushroomed from $2.1 billion in assets to $3.8 billion, making it the 10th largest stock fund in the U.S.
 Analysts generally like the concept of index funds but warn small investors that blue-chip indexes such as those based on the S&P 500 may not continue to do well. "About 20 percent of managers can outperform the indexes over the long term," says Ken Gregory, president of L/G No-Load Fund Analyst, a newsletter in San Francisco. "In addition, small stocks have much more growth potential than the big stocks in the S&P 500, so investors who stick with blue-chip index funds will be missing major opportunities."
 Last week, the MONEY Index, which tracks the typical individual's holdings, rose $185 to $46,725. Stocks gained $126, bonds added $48, and CDs and money-market funds contributed $17.
 This Last Year % Change from a
 Week Week Ago Week Ago Year ago
 113.36 112.91 100.05 +0.40% +13.30%
 Latest changes for each asset
 % change from a
 Category Index Week Ago Year Ago
 Stocks
 NYSE 119.94 +1.16% +19.68%
 ASE/OTC 144.46 +0.37 +44.29
 Equity funds 121.74 +0.32 +21.13
 Bonds
 Taxable Bonds 112.92 +0.48 +12.73
 Municipals 111.41 +0.23 +10.22
 Bond funds 115.02 +0.29 +13.98
 Short-term assets
 CDs 105.96 +0.09 +6.25
 Cash 104.96 +0.08 +5.19
 Other
 Real estate 101.03 +0.09 +1.01
 Gold 98.16 -2.28 +2.22
 Dec. 28, 1990 equals 100
 Where average small investors have their money now
 Current Year Ago Current Year Ago
 NYSE 20.05% 19.14% Bond funds 5.00% 4.12%
 ASE/OTC 6.33 6.04 CDs 19.25 21.93
 Equity funds 4.64 3.50 Cash 22.56 21.96
 Taxable bonds 16.49 17.23 Real estate 0.78 0.78
 Municipals 4.33 4.72 Gold 0.56 0.58
 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- 12/16/91
 /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 Straus of Money Public Relations, 212-522-2695/


JT-CK -- NY053 -- 2461 12/13/91 15:17 EST
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Date:Dec 13, 1991
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