Closed-end income fund offers monthly dividend, and growth

The Ticker

January 21, 1998|By Julius Westheimer

WITH the Dow Jones industrial average standing at 7,873.12, down 35.13 points from New Year's Day and off 386.19 points from its all-time high, but 989.22 points above its level one year ago today, where do you put your money now?

"If you want steady and rising income, check into Duff & Phelps Utilities Income Fund," advises Income Digest, adding, "The fund is a closed-end investment company that invests mainly in stocks and fixed-income securities in the public utility industry."

Duff & Phelps sells for about $10.50 a share, yields 7.4 percent and pays a monthly dividend. The fund's main objective is to bring investors high current income and long-term income growth. The $2.3 billion fund holds about 72 percent of its assets in stocks, including 41 percent in electric utilities, five percent in natural gas, 16 percent in telecommunications and 10 percent in real estate investment trusts. The remainder is in utility bonds, treasuries and cash.

STOCKS WORRY YOU? "I don't think there are any more Wall Street problems today than there were in any of the 58 years since I became an investment counselor in 1940." (John Templeton, dean of mutual funds.)

STILL WANT BONDS? "It's Bond Market Heaven," says a headline in a Fortune, Feb. 2, article. Chief economist Scott Grannis of Legg Mason's Western Asset Management says, "The outlook has never been so positive for bonds, and the best is yet to come." He has beaten the Lehman aggregate bond index -- the fixed income S&P 500 -- in 20 of the past 23 years.

An excerpt: "30-year zero-coupon bonds, which will pay 100 cents on the dollar at maturity, are selling for 18 cents on the dollar and yielding nearly 6 percent. If inflation runs at 1 percent over the next several years, this strikes me as very attractive."

LOCAL LINGO: "Deflation will engulf Asia, a negative for U.S. stocks. Recently, investors have succeeded in just buying 'big-name' stocks, but selection will now rise to the fore." (Steve Hanke, professor of applied economics, the Johns Hopkins University.)

HANG IN THERE: "Your chance of losing money in leading stocks over various holding periods: One year, 26 percent; three years, 14 percent; five years, 10 percent; 20 years, zero." (Newsweek, based on the Standard & Poor's 500 stock average since 1926.)

Pub Date: 1/21/98

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