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Subject: Making Money In The Mutuals
Date: Tue, 27 Oct 92 16:00:26 EST
Message-ID: <8.1992Oct27.160026@AmeriCast.com>


10/27/92

TITLE Making Money In The Mutuals #m#134 lines w/out photo#m#
#m#rama/wm#m#Value Line Cuts Minimum Investment Level MFS Plans
To Merge Two Fund Families Under One Group Doug Rogers Value Line
Mutual Funds has changed its minimum investment policy, allowing
as little as $40 as long as investors are in an automatic pur-
chase program.

In automatic purchase programs, money is regularly drafted from
the shareholder's bank account each month.  All Value Line funds
are pure no-load, with no front-end or back-end sales charges and
no distribution fees.  Before the change, Value Line required at
least $1,000 to open an account involving its mutual funds.
Value Line says the main appeal of its new policy will be to fam-
ilies whose savings have never been anywhere other than at a
bank. Most of them are earning less at the bank now because in-
terest rates have dropped sharply in the past two years.  The new
program can be used for any of Value Line's 12 funds.  Harry
Read, Value Line Securities executive vice president, says the
savings plan is intended to lure new investors by the "most pru-
dent route: regular periodic investing."

This method, also called dollar-cost averaging, calls for invest-
ment of a fixed amount of money in a particular fund on a regular
basis. Thus, more shares are bought when prices are down and
fewer when prices are up. "This proven method is one of the best
ways for shareholders of modest means to build a nest egg," he
said.  Value Line Mutual Funds, a unit of Value Line Securities
Inc., has more than $1.5 billion under management in its funds.
*** #m#10/15/92#m# Massachusetts Financial Services plans to
change its two families of funds into one group with two classes
of shares.  MFS has asked the Securities and Exchange Commission
to approve the pricing proposal.  Each of MFS' two fund families
now has its own pricing structure. Investors in the MFS Family of
Funds (except those in the money market fund) pay a front-end
sales charge plus a low annual distribution fee.

Investors in the MFS Lifetime Investment Program pay no front-end
charge, a higher annual distribution fee and a declining
contingent-deferred sales charge for redemption of principal made
within six years.  By creating multiple classes, MFS seeks to
make both pricing structures available in a single fund family
that would have dual pricing for nearly every portfolio MFS
offers.  Holders of Class B shares, or those with the back-end
load structure, would have those shares converted to Class A
shares automatically, with the lower annual fees, eight years
after purchase.  The structure would create the potential for
lower fund expenses for many MFS shareholders, said William W.
Scott Jr., president of MFS Financial Services Inc., the distri-
butor of the funds. Expenses will be spread across a larger pool
of assets.  The change is expected to take place in the second
half of 1993, after regulatory and shareholder approval.  MFS
manages $29 billion in assets.  ***

Investors who scan the mutual fund tables may be curious about a
recent addition: TRAK Funds.  The 12 funds listed under the group
-
 ranging from money market funds to domestic and international
bond and stock funds - are part of Shearson Lehman Brothers
Inc.'s wrap account service. Investors can't buy the funds out-
side of the TRAK program.

Those who participate in the program first meet with a Shearson
financial consultant, who determines the client's financial goals
and risk tolerance through a questionnaire. A Shearson consulting
group uses the information to prepare a recommendation for how
the client should allocate his or her assets among TRAK funds.
The client's financial consultant assists in evaluating the ad-
vice contained in the recommendation. The consultant also offers
interpretations in light of personal knowledge of the client's
circumstances.  The financial consultants don't have discretion-
ary control over the client's assets. All investment decisions
remain with the client, who has the option of accepting the
Shearson recommendation or selecting an alternative.  The minimum
investment is $20,000 for IRA accounts and $25,000 for regular
accounts.  The managers of the individual TRAK funds are selected
by the consultant group based on their expertise in their fields
and can be fired by the consultant group. None of the TRAK fund
managers runs other Shearson mutual funds.  All TRAK funds are
no-load and charge an annual management fee of 1.5% of assets. In
addition, they charge expenses ranging from 0.5% to 1.5% of as-
sets, which in the latter case can lead to a total fee of 3%.
For more information, call (212) 464-8725.

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