Log on, click in, pick a fund, get rich

Mutual funds

December 08, 1996|By Jerry Morgan | Jerry Morgan,The Mutual Fund Investor's Center Web site Pub Date: 12/08/96 NEWSDAY

"Somewhere in space, I hang suspended."

-- "Stranger in Paradise," from "Kismet"

Wall Street and mutual funds. Somewhere in cyberspace they hang suspended, waiting for investors to log on, click in and buy.

Every mutual fund seems to have a Web site whose aim is to inform you of its funds and sell them. There are commercial sites that will let you create funds you can track, for a price; there are brokerage houses that will allow you on their sites if you register by listing your name and address. Be assured: A broker will call or mail will follow. No altruism here.

There are now hundreds, perhaps thousands, of financial Web sites out there and more coming every day. A frightening thought: Soon there may be as many financial Web sites as there are mutual funds. They seem to be proliferating as rapidly.

But today we are going to look at one site because it is especially useful to new mutual fund investors, who need information, want to check the price and performance of more than 800 no- and low-load funds, want to create a model portfolio, just sound off, get a chance to do some free retirement and/or college funding planning and, if they want, jump to 26 fund-company home pages for more detailed information, and jump back.

The site is the Mutual Fund Investor's Center, sponsored by the Mutual Fund Education Alliance, a not-for-profit group based in Kansas City and funded by 42 no-load mutual fund companies. It can be reached at http: //www.mfea.com. The site opened in September, and Alliance managing director Michelle Smith said that so far about 1,000 people a day are using the site.

"They aren't just surfing and popping in and out," she said. "They are looking at an average of about 15 pages on the site, so they are getting involved with it."

There is a lot to see and do on the 350-page site. You can, for example, click to the fund quick list, pick out some criteria (say, aggressive growth funds with no 12b-1 fees and with $2,500 minimum investments), click again and get a list of the funds that meet those criteria. The list, to be sure, is culled only from the member funds, but those members include, for example, Kaufmann, Lexington, IAI, Janus, Fidelity, Dreyfus, T. Rowe Price, Twentieth Century/Benham and Vanguard.

For the novice, a click on "Get Educated" will cover a rash of topics, including: what is a mutual fund; dollar-cost averaging, risks and rewards; the magic of compounding; tax considerations, and the commercial -- the advantages of no-load investing. The members are primarily no-load, direct-marketed fund firms.

The "Map Out a Plan" section allows you to do retirement planning with interactive work sheets that are only on your screen, a note says, so no one else can read the personal financial information you type in. Based on its assumptions, which include needing 70 percent of your current income in retirement, it will tell you where you are now and how much you need to save to meet that goal. There is also a new college planning interactive feature.

"We want to create new mini-sites, including a children's fund section and and upgraded tax section," Smith said.

One thing not available is real comparative fund performance and a ranking of funds. That requires constant updating. "If we do that, people are going to want recommendations," she said, "and we are an educational group" that doesn't offer that kind of advice.

Daily net-asset-value share prices, usually a day behind, and year-to-date performance are available on the fund prices list. But longer-term performance data is not, though it can be obtained by jumping between fund firm Web sites to get it.

And, if investors want, they can order prospectuses of funds they like. Selling funds, as well as education, is always the name of the game.

Several fund companies on the Alliance Web site said they hadn't yet tracked the number of people who had jumped into their site from the Investor's Center site.

But Smith said some companies had removed some brochures that had been on the electronic shelves of the bookstore because demand was too great.

Who is using this site? Not surprisingly, it is people -- largely higher-income people -- who are already investing in funds. About 25 percent of those using the site said they had incomes of between $50,000 and $75,000, but another 22 percent had incomes of over $100,000. Most, 83 percent, were already mutual fund investors; 70 percent owned no-load funds. And 25 percent already had between $100,000 and $250,000 in mutual fund holdings.

The typical site user here is in line with what some brokerages and fund companies have already found: mostly male (86 percent), mostly affluent, and often willing to do-it-themselves if they have the information. The Investor's Center is one of the largest free access mutual fund resources on the the Internet, at least for now. And, while it is primarily an educational site, keep in mind that ".com" stands for "commercial."

Investor insight

What mutual fund investors say about the market and their strategies, according to the Mutual Fund Investor's Center Web site.

Does the Dow Jones industrial average affect your confidence as a mutual fund investor?

Yes: 54.3

No: 45.7

In the event of a major drop of 200 points or more, what are you most likely to do?

Take advantage of lower prices and buy mutual funds: 55.60

Sell my mutual funds: 0.68

Stay invested, but reallocate my investments: 23.05

The Dow's level does not affect my strategy: 20.68

If you were to predict, what do you think is most likely?

The Dow will continue to climb through year-end: 41.36

A major correction is coming by year-end: 23.39

No major movement either way is likely this year: 35.25

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.