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There are several types of mutual funds other than the money market funds and common stock funds. There are a large number of bond funds, investing in various assortments of corporate and government bonds There are tax-exempt bond funds, both long-term and shorter-term, for the high- bracket investor There are "balanced" funds which maintain portfolios including both stocks and bonds, with the objective of reducing risk And there are specialized funds which invest in options, foreign securities, etc.

8.5 The Daily Mutual Fund Prices

One advantage of a mutual fund is the ease with which you can follow a fund's performance and the daily value of your investment. Every day, mutual fund prices are listed in a special table in the financial section of many newspapers, including the Wall Street Journal. Stock funds and bond funds are listed together in a single alphabetical table, except that funds which are part of a major fund group are usually listed under the group heading (Dreyfus, Fidelity, Oppenheimer, Vanguard, etc.).

The listings somewhat resemble those for inactive over-the-counter stocks. But instead of "bid" and "asked", the columns are usually headed
"NAV" and "Offer Price". "NAV" is the net asset value per share of the fund. it is each share's proportionate interest in the total market value of the fund's portfolio of securities, as calculated each night It is also, generally, the price per share at which the fund redeemed (bought back) shares submitted on that day by shareholders who wished to sell The "Offer
Price" (offering price) column shows the price paid by investors who bought shares from the fund on that day. In the case of a load fund, this price is the net asset value plus the commission 01 "load" In the case of a no-load fund, the symbol "N.L." appears in the offering price column, which means that shares of the fund were sold to investors at net asset value per share, without commission. Finally, there is a column on the far right which shows the change in net asset value compared with the previous day.

8.6 Choosing a Mutual Fund

Very few investments of any type have surpassed the long-term growth records of the best-performing common stock funds. It may help to say more about how you can use these funds.

If you intend to buy load funds through a broker or fund salesperson, you may choose to rely completely on this person's recommendations. Even in this case, it may be useful to know something about sources of information on the funds.

If you have decided in favor of no-load funds and intend to make your own selections, some careful study is obviously a necessity. The more you intend to concentrate on growth and accept the risks that go with it, the more important it is that you entrust your money only to high-quality, tested managements.

There are several publications that compile figures on mutual fund performance for periods as long as 10 or even 20 years, with emphasis on common stock funds. One that is found in many libraries is the Wiesenberger
Investment Companies Annual Handbook. The Wiesen-berger Yearbook is the bible of the fund industry, with extensive descriptions of funds, all sorts of other data, and plentiful performance statistics. You may also have access to the Lipper Mutual Fund Performance Analysis, an exhaustive service subscribed to mainly by professionals. It is issued weekly, with special quarterly issues showing longer-term performance. On the newsstands, Money magazine publishes regular surveys of mutual fund performance; Barren's weekly has quarterly mutual fund issues in mid-
February, May, August and November; and Forbes magazine runs an excellent annual mutual fund survey issue in August.

These sources (especially Wiesenberger) will also give you description of the funds, their investment policies and objectives. When you have selected several funds that look promising, call each fund (most have toll- free "800" numbers) to get its prospectus and recent financial reports. The prospectus for a mutual fund plays the same role as that described in "New
Issues." It is the legal document describing the fund's history and policies and offering the fund's shares for sale. It may be dry reading, but the prospectus and financial reports together should give you a picture of what the fund is trying to do and how well it has succeeded over the latest 10 years.

In studying the records of the funds, and in requesting material, don't necessarily restrict yourself to a single "risk" group. The best investment managers sometimes operate in ways that aren't easily classified. What counts is the individual fund's record.

Obviously, you will want to narrow your choice to one or more funds that have performed well in relation to other funds in the same risk group, or to other funds in general. But don't rush to invest in the fund that happens to have performed best in the previous year; concentrate on the record over five or ten years. A fund that leads the pack for a single year may have taken substantial risks to do so. But a fund that has made its shareholders' money grow favorably over a ten-year period, covering both up and down periods in the stock market, can be considered well tested. It’s also worth looking at the year-to-year record to see how consistent management has been.

You will note that the range of fund performance over most periods is quite wide. Don’t be surprised. As we have stressed, managing investments is a difficult art. Fund managers are generally experienced professionals, but their records have nevertheless ranged from remarkably good to mediocre and, in a few cases, quite poor. Pick carefully.

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