t
16 MAIL TRIBUNE, M.dford, Oregon, Thursday, October 30, 1931
Simple Explanation of Mutual Fund Given by Investment Head
Mm
By ELMER C. WALZER
UPI Financial Edilor
New York 0.TL The other
day the daughter of a Boston
executive asked him: "Father,
r" what do you
pjt 3 know about
, mutual funds."
' S' She explain-
""6 Aj 4V,-. . fncnJ
7 had been by to
starting a cu
mulative pro
gram in such
a fund
timer Waller "He sounded
very interesting, sne saia
"but I'm wondering what you
think about mutual funds."
This Boston businessman
living in a city that is the
headquarters of many a giant
mutual fun d admitted he
was stumped j u s t couldn't
give a real answer.
The mutual fund industry
has grown from less than $500
million in assets in 1940 to
nearly $12 billion at present,
and many still don't know
what a mutual fund is.
So this department asked
Henry T. Vance, senior part
ner of Vance, Sanders & Co.,
and president of the $177 mil
lion Boston Fund, for a simple
definition of a mutual fund.
Here it is:
Diversified Investment
"A mutual fund (or invest
ment company) simply com
bines money set aside by
thousands of individuals in
one large investment fund.
Professional management is
employed by the mutual fund
to select and diversify (spread
the risk) investments among a
broad cross-section - of com
panies in many industries,
and to keep these investments
T
RUSSIAN WINNER Rus
sian physicist Pavel A. Cher
enkov, discoverer of the
"Cherenkov effect," has
been awarded the Nobel
Prize for Physics. It is be
lieved the Cherenkov effect
may have been put to prac
tical use in Russia's sputniks.
Chinese Reds May
Use Sneak Attacks
Taipeh, Formosa-(UPD-Adm.
Liang Hsu-chao, commander
of the Chinese Nationalist
Navy, said today the Commu
nists may soon send large
warships and submarines into
the Formosa Straits to attack
Nationalist vessels.
Liang, in a congratulatory
message to naval personnel
credited with meritorious
service in the Quemoy area,
said the Red Navy may open
a second stage in the offshore
island fighting with sneak at
tacks from larger naval ves
sels. Civilian authorities on Que
moy reported that 99 civilians
have been killed in the Com
munist bombardments that
started Aug. 24. They said
252 civilians have been
wounded, 96 seriously. Mili
tary casualties were not announced.
Singer Dean Martin
Files Damage Suit
Los Angeles -dTD- Singer
Dean Martin Wednesday
sought $90,000 damages in a
Superior Court suit growing
out of a traffic accident last
Aug. 24.
Donald Robert Seddon, 39,
of nearby Santa Monica,
Calif., was named defendant
in the suit which charged he
rammed a car driven by actor
Tony Curtis in which Martin
was riding. The singer asked
$50,000 for injuries and $40,
000 for loss of earnings.
ELUSIVE MONKEYS
Milwaukee TUPD Summer
may be over as far as people
are concerned, but 47 monk
eys on the Washington Park
Zoo summer island won't ac
cept its demise. Trainers were
able to catch only half of the
97 monkeys that inhabit the
island, for transfer to winter
quarters.
Louisiana's mechanized su
gar industry harvests more
than 200,000 acres of cane
each year, about three-quarters
of tjge United States crop.
under continuous supervision
"Thus by owning shares in
a mutual fund the investor ob
tains in a single certificate a
managed investment repre
senting a diversified list of se
curities that he might not in
dividually afford.
"Mutual fund shares which
are purchased through invest
ment dealers with a sales
charge of ahon 7 -t cent,
are readily marketable.
"If the investor ants to
close out his investment or
sell part of it, he sells the
shares back to the fund itself.
The price, of course, is based
on the market value of the
portfolio at the time of the
transaction, and may be more
or less than the investor's
cost."
'Open End' Company
A mutual fund is also
called an open-end investment
company. That means there is
no specified number of shares
outstanding. The number of
shares rises or falls as the
fund sells its stock or buys it
back.
There is a so-called close
end investment c o m p a n y
! which has a fixed number of
shares like an ordinary cor
poration. These companies
usually are listed on ex
changes, and the shares traded
like those of General Motors
or U. S. Steel.
Shareholders in mutual
funds have, risen from 300,
000 in 1940 to 3,500,000 to
day. Arthur Wiesenberger, ex
pert on mutual funds, recent
ly predicted that mutual fund
industry will expand to assets
of more than $40 billion with
"at least" five million share
holders by 1968.
Explaining the popularity
of mutual .funds, Vance says
that a desire to hedge against
inflation is only part of the
answer.
Long Term Holdings
He points out that today's
investor also is seeking diver
sification, professional man
agement, - and convenence in
planning his investments. "A
mutual fund," he says, "meets
these requirements."
Vance explains the mutuals
are no get-rick-quick invest
ment. "They- are used by
many individuals in long-term
financial planning for retire
ment, to provide college edu
cator and to possibly increase
income over that which can
be obtained from many fixed
income types of savings."
He points out that many
trustees and institutional in
vestors such as college endow
ment funds, profit sharing
plans and religious organiza
tions are putting their money
to work in mutual funds in
increasing numbers. This, he
adds, has given the mutual
fund an even greater impetus.
Maybe All Polls
Should Be Checked
Indianapolis -IUPB- Call this
coincidence?
Republican State Chair
man Robert Matthews said to
day that to prevent fraud
federal supervision of the
polls is needed Nov. 4 at In
dianapolis, East Chicago,
Evansville, Gary, Hammond,
South Bend and Terre Haute,
all of which have Democratic
mayors.
And Democratic State
Chairman Charles Skillen said
the . .cities that need federal
protection against vote fraud
are Lafayette, Fort Wayne
and Elkhart, all of which
have Republican mayors.
November Playboy
Order Banned
Washington -UPD- The Post
Office Department announc
ed Wednesday night it has
ordered copies of the Novem
ber issue of Playboy maga
zine withheld from the mails
following a complaint it is
obscene.
The department said its
general counsel, Herbert B.
Warburton, "Is of the opinion
that the November issue . . .
is non - nfailable and has
instructed the postmaster at
Chicago to withhold any
additional copies offered for
mailing t . ."
TYPHOON KILLS TWO
Manila -0PD- Typhoon Lor
na skirted the central Philip
pines Wednesday, leaving two
dead and crippled communica
tions in southern Luzon.
SLAB
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