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SMALL INVESTORS FLEE MONEY FUNDS

 SMALL INVESTORS FLEE MONEY FUNDS
 /ADVANCE/ NEW YORK, May 17 /PRNewswire/ -- As yields on money-market


mutual funds sank to an all-time low of 3.57 percent last week, small investors stepped up their search for other investments that offer higher returns, according to data gathered for Money magazine's Small Investor Index.
 In the six weeks since April 1, individuals have moved a net $8.5 billion out of taxable money-market funds, compared with $7.5 billion in the previous six weeks. The reason for the rush: the funds' yields have fallen 1.1 percentage points since Jan. 1. And they are likely to go lower still, especially if the Federal Reserve cuts interest rates again, as many analysts expect.
 Much of the cash leaving money funds is going into mutual funds that offer higher yields without big risks. For example, the $550 million T. Rowe Price Adjustable Rate Mortgage Fund, which pays 7.1 percent, took in a net $33 million in the first two weeks of May. The firm's $1.7 billion Equity-Income stock fund, yielding 4.2 percent, picked up $48 million. Similarly, the $645 million Scudder Short-Term Global Income Fund, yielding 8.8 percent, attracted $30 million, while the $365 million Strong Short-Term Bond Fund, paying 8.6 percent, drew $32 million.
 Most analysts think that taking advantage of higher yields is sensible, as long as investors don't go overboard. "It's too risky for most money fund investors to switch to the highest-yielding alternatives, such as junk bond funds," says economist Maria Ramirez, president of Maria Ramirez Capital Consultants in New York City.
 Last week, the Small Investor Index, which tracks the average individual's holdings, lost $44, dipping to $45,954. Stocks dropped $134, while bonds gained $73. Certificates of deposit and money funds contributed $14, and gold added $4.
 This Last Year % Change from a
 Week Week Ago Week Ago Year Ago
 102.17 102.27 92.77 -0.10% +10.14%
 Latest Changes for Each Asset
 % Change from a
 Category Index Week Ago Year Ago
 Stocks:
 NYSE 103.18 -0.58% +14.45%
 ASE/OTC 103.07 -1.82 +19.65
 Equity funds 103.54 -0.68 +14.37
 Bonds:
 Taxable bonds 101.23 +0.60 +11.82
 Municipals 102.78 +0.69 +11.36
 Bond funds 101.82 +0.64 +11.79
 Short-term assets:
 CDs 101.70 +0.08 +5.31
 Cash 101.48 +0.07 +4.52
 Other:
 Real estate 97.78 -0.22 -5.83
 Gold 93.61 +1.91 -5.08
 Dec. 27, 1991 equals 100
 Where Average Small Investors Have Their Money Now
 Current Year Ago Current Year Ago
 NYSE 22.15% 21.90% Bond funds 5.38% 4.37%
 ASE/OTC 6.99 6.92 CDs 16.13 19.37
 Equity funds 5.20 4.27 Cash 23.27 21.65
 Taxable bonds 12.69 13.13 Real estate 0.76 0.76
 Municipals 6.91 7.08 Gold 0.52 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- 5/18/92
 /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 -- NY080 -- 0842 05/15/92 15:01 EDT
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Date:May 15, 1992
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