us-ftc-advocacy-filings-38f5181da48a73349181dd47ad608b95•FTC Staff Comment Before the Securities and Exchange Commission Concerning Proposed Rules and Rule Changes on Mutual Fund Advertising
FTC Staff Comment Before the Securities and Exchange Commission Concerning Proposed Rules and Rule Changes on Mutual Fund Advertising
us-ftc-advocacy-filings-38f5181da48a73349181dd47ad608b95FTC Staff Comment Before the Securities and Exchange Commission Concerning Proposed Rules and Rule Changes on Mutual Fund AdvertisingAdvocacy Filing
Comments of the Bureaus of Competition. Consumer Protection and Economics of the Federal Trade Commission· on Proposed Regulations of the US. Ser Governing Perf, Advertising by . lit· ~-: CQ:nmission December 22. 1986 • These comments represent the views of thc Burcaus of Competition. Consumer Protection. Jnd Economics of the Federal Trade Commission and do not necessarily represent the views of the Conl'mission or of any individu::l1 Commissioner. The C')mmission. however, has authorized the submission of thes:: comments.
1. I0lTRODUCTIO)[ The SEC has rcquested commcnt on sc\..:rai proposed rules and ruk changes governing advertising by mutua! funds. l The proposals \l.ouiJ restrict advertising of performance claims to narrowly prescribed formulas. time periods, and formats. In the late 1970s and early 1980s, the SEC abandoned many of the long-standing restrictions it had imposed on advcrtising of pcrformanc::: claims by investment companies. This deregulatory :::ffort was intendcd to increase investor interest and access to information about no-load funds and reflected the agency's recognition ~hat revising its regulations to keep pacc with innovations in financial instruments was cxtrcmely difficult. Following these reforms, the markct share of no-load funds incrcased dramatically and many innovative funds were established. Now, however, the SEC is considering advertising regulations even mor::: restrictive than those of the previous decades. Although the proposed restrictions may be justified in some specific applications, we are conccrned that they sweep much morc broadly than they should. As now formulated. they :lrC likely to elimin:Hc many current nondcc:::ptive truthful pertormanc::: clJ.ims. incrcase th::: .;:)s: and decrease the effectiveness of remaining performance advertiscments. diminish effectivc consumer access to information about no-load funds with lower sales and distribution costs, and hamper the development of innov:ltivc funds. Federal Register, Vol. 51, No. 18; (September :6, 1986). pages 34384-34~08. The SEC proposals, which conc~rn advertisements covered by SEC rule 481, originated trom ones made earlier by the Investment Compan:, Institute (fCI). The ICI proposals were limited to deCining a yield f0rmui:l 10r income funds. The SEC proposals extend to sc-,cr:ll addition:!! issues.
The FTC staff recommends ag:linst restricting or limi[ing nond;:c:::p,!\;; [ruthful performance :ldvenising [0 specific formulas, time perlOcs ,~'r formats (Section I1.B.1. below). If the SEC has e '. ide nce [h ate0 nsurn;; rs would benefit from greater uniformity of performance advertising, [he SEC could consider the less restrictive approach of endorsing a particu!:lr tot:lI return and yield formulas and encouraging their use without prohibiting :llternatives (Sections ILB.2. and 3.) If the SEC h:lS evidence th:lt consumers are confused about certain characteristics of mutual funds, the SEC ::ould consider simple triggered disclosure requirements addressing the specific points of confusion (Section ILBA.). II. FTC STAFF ANAL '(SIS AND RECOMMENDA nONS A. General Comments The FTC staff's major objection is that many of [he SEC proposals would restrict advertising of truthful and non-decepti ve performanc~ claims. We regularly evaluate restrictions on non-deceptive truthful advertising :lnd mandatory disclosures in carrying out the FTCs consumer protection miSSlon.~ Our research :lnd invesrig:lrions provide .:onvincing evidence th:l~ Z The FTC has actively pursued research, regu!:ltions, and cases in this area. The FTC staff's research on advertising restrictions includes: \V Jacobs et al. Improving Consumer Acc~ss to legal Services: The Case for Removing Restriction on Truthful Advertising, \Vashington, D.C.: Fedcr:ll Trade Commission, 198~; R. Bond et aI., Effects of Restrictions on Advertising and Commerci:ll Practice in the Professions: The Case of Opwmetrv, Washington, D.C.: Federal Tr:lde Commission, [980; R. Bond :::t :II.. "Self Regulation in OptOmetry: The Impact on Price :lnd Quality," l:lw :lnct Hum:ln Behavior 7:2 (1983), pages 219-23~; Drug Product Sclection, Washington, D,C.: Feder:ll Trade Commission, [979; and A. Masson and R, Steiner, Generic Substitution and Prescription Dru!2 Prices: Economic Eff;;::,s of St:l.tc Drug Product Substitution L:lws, W.ashingtOn, DC.: Federal Tr:\.j~ Commission, 1985 Also se~ A. Ylaurizi, "The Effects ot' Laws Ag:linst Pr;,.:;; Ad',ertising: the C:lse ,),' Ret:lil Gasoline," \\';;srcrn E::ont')mi,;~ ]ourn:\:. 1':' 119-:-:i. p:lges 3:1-3:9; .-\. \"1:1.urizi :lnd T. K,:.:lly. Pri,.:~s :1nd CO;'1,~!~;';~
most regulations restricting the distribution of non-decepti\c trut~t'ul information harm consumers (or. In the case of investment products. investors) and should therefore be a voided. Bcca usc consumers l :lCC different circumstances and have varying preferences, they seek differe:H _ types of information. Restrictions on truthful advertising claims increase consumers' costs of locating the most suitable products ::lnd the lowest price sellers. As a result, consumers are more likely to make inferior pur.:::hase decisions. With less ability to inform consumers, efficient and innov:ltive producers will be less able to attract consumers and hence the VarIety of prod ucts w ill "be red uced. In addition to our general objections to restrictions on tru thful non deceptive advertising, the SEC proposals ::lppear to be based on what we believe is an incorrect interpretation of the role of advertising in marketing mutual funds. The SEC seems to believe that each advertisement should be viewed as the sale piece of information on which investors might base their investment decisions. In contrast, we believe that advertising often serves primarily to catch the attention of investors and ::lliows them to narrow their se:lrch for further inform::ltion to :l small number of funds that are most :tp: to be suitable for their needs. The plethor::l of compar:ltive performance information, including many widely avail::lble investment publications (See Appendix A), brokers, toll free information numbers, ::lnd the prospectus and other sales literature, all support this latter view of the role of perform::lnce rnformation: The Benefits of Posting RetJil G:tsoline Prices, Washington. D.C., American Enterprise Institute, 1978; L. Benham, "The Effe-:t of Advertising on the Price of Eye-Glasses." J()urn~1 ot' L:tw :lnll Economics, 15:2 (October 1972), p::lges 337-35:; and R. Feldm::ln ::lnd J. Begun. 'Docs Advertising of Pri·,:e Reduce the \-le::ln :lnd V:lri::tnce of Prices:." E':0"r·'1';-: [oauin', 13 !July 1980). p:tges -187--19:.
:ldv~rtising. Indeed, the VIeW that investors make decisions b:lsed solely on :ldvertisements IS completely inconsistent with existing SEC requirements concerning distribution of the det:liJed prospectus. 3 B. Specific Suggestions With the previous observations in mind, the FTC staff has the following specific suggestions :lbout the SECs propos:lls. I. PrQhibition Qf All But CertJin "farrQwlv Prescribed Perform1nc::: Cl:lims: The FTC st:lff's greatest CQncern is the prQposed ban on :lII performance claims other than n:lrrQwly prescribed yield and total return claims (discussed in subsections 2 :lnd 3). Such a ban would eliminate signific:lnt amounts Qf currently :lvailable invcstment information leading to higher investor search CQsts, poorer investQr decisions. reduced prQduct v:lriety, :lnd less effective cQmpetition :lmQng funds. 4 Equally import:lnt, such restrictions likely would make it more difficult both for relatively new funds to expand and for investors to CQmpare the performance of mutual funds with that of othcr investment options (such :lS CDs, directly held 3 Cert:linly the rationale ior the SEC reqUIrement th:lt :·:..lr.ds distribute a detailed prospectus is undermined if, :lS the SEC :lssumes. investQrs use only :ldvertised information :lbout the fund. Further. ii advertisements are the only or primary source of invc~tor iniormation. it is :lll the more import:lnt that the SEC not limit the information that funds :lre seeking tQ provide. The SEC could g:lther evidence on the dcgree of investor reli:lnce on :ldvertisements to the cxclusion of other sources of iniormation :lnd then search for evidence that this reliance is mispl:lced. \Ve note th:lt there is some evidence that mutu:ll funds investors on :lverage do ::lbout ::lS wcll ::lS the marker. See, for example, H. Sh:lwky, "An Cpdate on \-tutual Funds: Better Gr::ldes," ]Qurn:ll of PQrtfolio Yfan:lgement, Winter 1982, pp. 29 - 34. 4 The SEC propos:l! to require dctailcd cxpl::lnations of ::lfI perform:lncc c::llcul:ltions in the currcnt prQspectus CQuid h::lvc simil:lr rcstrictive et'fe:;rs by removing flcxici!it:. to :ld\'crtise ::llternJti';c pert'orm:lnce mC:lsurCS ,:ur:ng the life Qf the prospcctus.
common stocks, and real est:lte). These likely effc.:ts He inconsistent "'irh the goals of encouraging innovation and improving investor information :l[;out different investment options. To determine the extent to which the SEC proposals would limit _ advertising of fund performance, we reviewed recent performance claims in advertisements in three leading periodicals. Appendix B reveals that many potentially important c!:lims would be banned by the proposed restrictions. Examples include: claims based on performance rankings calculated by independent parties such as Lipper Analvtical Services, Monev, \1/311 Street Journal 5, or Moodv's for various periods, total returns over periods longer than five years, simple and compound average annual total returns, graphical presentations of returns, performance comparisons measured 3g:linst broad market indexes such as the S&P 500 or the rate of inflation, and reports distinguishing capital gains from returns due to reinvestment of dividends. s Any of these factors could be critical to a particular investor's sear~h behavior and investment selections. In addition, the proposed regulations would curtail :ldvertising of potentially useful perform:lnce comparisons involving .:ircumstanccs th:H oc.:~r irregularly, such as how a fund performed when the dollar was l:1s( 5 "A Special Report: Financial Planning," \1/:1Il Street Journal, Se~tion 4, December I, 1986, pages 50 to 7D. 6 To the extent that any of these performance characteristics :lrC either required or allowed in the prospcctuS, it would be illogical and inconsistent to prohibit thcm in advertisemcnts, :lssuming they are nondeceptive in the conte:<c of each particular advertisement. The data in the current and past perspectuses :lre public and In combination with pricing d:J.t:l in the newspapers :lre sufficient to calcul:ltc all of the statistics published by investment services and business publications. There IS no issue concerning public availability ot' d:H:1 necessary (0 calculate PCii' )rr.nn.::e mosures. 5
depreciating ag::linst foreign currencies.; [n \ ~ S tor sin t~ res ted p rim a r it :' : n cash flows could ::lIsa find advertisements less inl"ormative with respe.:: [.J the performance me:lsures of greatest use to them. such ::lS current :' lctJ (di vidends and interest income of the fund) or distributions to shareholders. S 2. Disclosure of Annual Total Returns for Five Years: The SEC proposes a "triggered" mandatory disclosure of annual total rate of return data for each of the most recent five years, calcul:lted in ::l preserl bed manner 9 , in :lny advertisements containing any performance clo.ims. [n the case of income funds, claims concerning yields (the only other permissible performance cl:lim) would trigger these toto.l return disclosures. In the case of other funds, only the total return claims would be :lUowed in the first place. 10 7 Specifically, the proposed requirement that performance data must be current (the end of the calculation period must be less than 30 do.ys before the publication date) would exclude such compo.risons to past periods. 8 An example is provided by the new corporo.te cash funds. These funds are of interest primarily to cash managers of small firms who are looking for extremely short term investments of excess cash that will quo.lify· for the corporate tax exemption on e:lrnings from investments in other fir:ns. Preventing corporo.te co.sh funds from advertising distributions will elimin:ltc the most rc!cvo.nt item of information for prospc~tive in\·cstOrs in these f;.;nds. g Calculation of total return, which includes capital gains, income, an': other distributions, is already standardized, o.nd we see no likely source of in vestor confusion. There seems to be no benefit from formalizing th is further with a regulation. The total return formula proposed by the SEC departs from the 5tandard approach, which allocates load chtlrges across whatever holding period is advertised. The SEC proposal tlttri butes all of the effects of initial load charges to the first year of holding and all redemption charges to the final yeo.r of holding and would seriously distort reported returns in these years. See Appendix C. 10 We infer thtl[ if the SEC were to allow additional performo.ncc claims las we suggested above). the SEC migt"kt require that all such ci:l;:ns be :lc:ompanied by these tot:ll rcturn disclosures. 6
The FTC staff recommends ag:linst such mando. tory d isclosu reo Although some investors m3y benefit t'rom this uniform int'orm:ltion. investors may beo.r costs that on bo.lo.nce exceed these benefits. For instance, the mandated information may clutter advertisements. particularly those involving broadcast media, making them less effective in conveying information, or it may crowd out other information th3t is more relevant to investors. The reduced effectiveness or increased costs of advertising performance claims caused by the mandatory disclosure requirements may cause some funds to reduce or discontinue their performance advertising altogether. This result is, in turn, likely to harm consumers because of its effects on search costs, investment decisions. 3nd product variety. A restriction on mutual fund advertising claims would presumably force potential purch3sers, at increased costs, to rely more heavily for their initial search on other sources of information, including published listings, investment services, and brokers. This restriction would hit hardest at the no-load and low-load funds that depend on advertising to promote investor interest, and would least affect high-load funds sold by broker·s. Thus, investors would likely make gre:lCer usc at' broker serVices and pay more sales charges than they would if they purchased no-load funds. Furthermore, we have doubts about the benefits investors would obtain from the proposed disclosure of total returns. Our first concern is that historic total returns for Income funds may be a systematically biased indicator of future performance In the present historic context. Tot:!1 returns on income funds typically :He inversely related to interest rates. As a result. total returns for income funds after :t period of f:tlling interest 7
r:ues, such :lS the present, :lre likely (Q be high. However, interest ~:lt;:s :lre unlikely to decline :ld infinitum, so the future p:lth of interest r:lres is unlikely to be as steep and subsequently future returns :lre unlikely to i.;e :lS high In the future. If so, forcing income funds (Q disclose five-ye::lfS or - total returns (if they advertise the current yield) may mislead investor's about the prospects for these income funds In the present historic circumstances. Our second concern is th:lt there:He many widely :lvaibt:le privately published rankings of all types of funds based on total returns over various periods (see Appendix A) making it questionable that there is :In information market failure in this mattcr. :"fct benefits from government mandated disclosures of additional information of this type are therefore unlikely. oJ. Yield C::llcul:ltions For Income Funds l !: Although the SEC seeks comments on the possibility of banning yield advertising entirely, the primary yield proposals :He to limit :ldvertising of yield claims to :l specificd formula and to ban entirely yield advertising by funds with less than 95% of the assets devoted to debt oblig:ltions. Yield c:J.lculations :lre :J. m:J.jor item of int'orm:ltion thJt in':csrors might want :J.bout income funds. Historic yield calcubtions :lliow investors to Corm better hypotheses about future performance cither in :lbsolute terms or relative to other investment options. Historic yield calculations He :llso :l good vehicle for drawing invcstor attention to the char:lcteristics of particular funds and thereby reducing investor se:lrch costs. 11 Yicld is distinct I'rom (QDI r:.:turn in th:lt it does not inc!;.;'::.: considcrJtion of ;:lpit:ll g:llns. 8
Bec:lUsc :l b:ln on historic yield olcul:ltions would likely h:lrm In\'cStOrs :lnd make ic more difficult for low cOSt :lnd high pcrform:lnce tunds (0 :lttr:lCt investors, the FTC st:lff strongly suPPOrtS (he SEC's propoSl! :J continue to permic Jdvenising of historic yield c:llcul:ltions. 12 We believe. however, that the SEC's proposal to ban yield claims for funds that do noc have at le:lst 95% of their assets in debt holdings is ::rpt to harm investors ::rnd ret:lrd the growth of the funds (hat best match investors' interests. For example, some funds adopt both income and growth goals and invest in both bonds and stocks. Investors might re:lsonabty want to know the yield on the portion of a fund's :lssets th:lt are invested in bonds, although if a fund chose to advertise yield on just a portion of its assets, the fund should have to disclose what portion had the advertised yield. In vestors who :lr:: particularly interested in C:lsh distributions might also want to know (he yield averaged across a fund's entire portfolio to determine how much yield they sacrifice in order to obtain the growth opportunities provided by the stock portion of the fund's portfol.io. 13 We also oppose regulations th:lt would prohibit mutual funds tram using all but one yield formub. Investors :lre likely tel be interested in morc th~r, one type of yield c:l!culation. For example, tor some purposes investOrs m:l:. be most interested in a yield that includes the effect of amortizing premiums and discounts. For other purposes, they m:ly want a yield figure that excludes the effect of such amortization. Simil:lrly, investors may want yIeld 12 Section ILl. in tht Feder:ll Register notice. 13 Such runds arc sometimes termed "oal:J.nc:d funds." EX:lmplcs ,)1 large ba b nc:::d fu nds i n,:1 ud:.: Investors \1u (uJ.1 lnd We II i n g tOn Fu nd. 9
information c:llculatcd for \arious tlme periods. ~,iclds th:lt include or ex.:lud:: the effects of various S:lles .:harges, etc. Although no truthful nondeceptive yield .:!:J.ims should be prohibit::':. yield advertising might be more informative for some investors if yields were reported In a uniform manner designed to facilitate comparison ot performance claims across funds and with other investments. For this reason, we agree that it might be appropriate for the SEC to encourage use of the specific yield formula that it believes to be the most inform:ltive. If investors find this voluntary standard to be helpful, fund managers will have an incentive to use the SEC formula bec:luse it will make their advertisements more effective. If the SEC has evidence that use of the "SEC yield" formula needs to be further encouraged, the SEC could consider a rule under which use of the "SEC yield" would not require further explJn:l.tion while use of other yield calculations would require an explanation at some appropriate level of conspicuousness. If the SEC has evidence that consumers are still being misled by use of yield formulJs such as the commonly used "current yield," the SEC should consider the merits of a rriggered disclosure requ:re;nCrl'. For example, advertisement oi any other yield formul:ls by :In income Cunc: might trigger a requirement to disclose the SEC yield in an equally prominent way. However, the SEC should keep In mind that such a requirement would raisc the costs and reduce the :lmount oi advertising of other yield information th:lt would be useful to consumers. The yield formula specified in the SEC proposals has technical diificulties and could !)c improved upon. Sugg~stions for amending the yielc formula are con ta i ncd i:: -\ P;K nd l,( D. 10
\ttand:ltorv Risk Disclosures: The SEC proposes (Q require mand:ltory disclosure of risk measures :lnd or risk-:ldjusted me:lSurCSJt return whenever any performance claims :lre m:lde. \Ve oppose :h:: compulsory aspect of this proposal. Funds should be free co disclose nondeceptive truthful historic risk measures, which may be useful to investors. Forcing funds to do so, however, may be counterproductive. First, mandatory risk disclosures might actually h:1Ve the perverse effe:t of reducing the amount of performance advertising. Some funds might refnin from advertising any performance measures a t all for fear that the complexity of these required disclosures would confuse investors. Second. mandatory disclosures always increase the c!urrer within advertisements, thereby reducing the effectiveness of all the other information including other mandatory disclosures and information which the fund managers believe • to be most useful to investors. 14 Moreover, there is no market failure with respect to general risk information. Sever:ll public:Hions and investOr services already produce and sell such information, and funds are free to include it in advertisements. 1S intervention. There is no justification for government 14 See Sections 11.B.2. and 3. concerning other proposed mandaror:.. disclosures. lS Major publications which provide risk measures for their re:lders are listed in Appendix A. Although many advertisements for bond funds reference bond risk ratings of the issues that they buy. none of the advertisements for other funds referenced specific risk me:lsures such 15 betas. (Beta is the standard risk measure used in finance texts. Beta is the coefficient on the m:lrket index variable in a regression seeking to explain rates of return on an investment over time.) Some advertisements did ch:lrt the value of an investment over time in comparison to :ln inde.t (such 1S the ~ew York Stock 'Exchange Composite Index) ..... hich would :lliow a patenti:l! investor to see how movements between the fund and 1 m:lrket index h:l'. C been correlated. Some :ld·.ertisements 11so mentioned :ontinuity ,n POS::l'. e r:ues of return over 5e'.-er11 ye:HS. II
Fin~ily, given the St1tus of current rese~rch. we urge c~utJOn e'::::n In endorsing a particular risk-ldjusted return me~sure :It this time, be::~ else ct' the substanti~l d~nger th~t it m~y l~ter be found ro be biased lnd or inaccurate. 16 5. Other DisclQsures: The SEC prQPQsals wQuld require a number of triggered disclQsures designed tQ prevent investor misperceptions Qf the me~nings Qf different perform~nce me~sures.li If the fund h~d the particular char~cteristic, it would have ro make the disclosure if it advertised performance claims. following: The prQposed disclQsures include the a. A disclQsure that explains how histQric perform~nce measures (which ·c:ury no necessary implication about future performance) differ from "guan.nteed" yields such as those arising from debt obliptions of the t:S. government Qr certific::ltes of deposit. b. A disclQsure distinguishing investments In which the value Qr the principal may vary Qver time from investments in which the value of the principal is fixed (at least in nominal terms). 1'3 S. Tinic lnd R. \Vest, "Risk, Rcturn, lnd Equilibrium: .-\ R.:'. ,s,~. Journ::rl of Pqlitical Economv, 94:1 (February 1986), P:lg-::s 126-]47. \Ve note in ::rddition that since e~ch invesror's increment::rl risk from investing in a p::rrticu!:lr issue is a function of his or her other assets, lny chosen risk me::rsure is likely tQ be an inherently somewhlt unreliable guide to that investQr's risk in buying the security. It is also difficult to determine how a relev::rnt risk measure for bond funds could be calcul::l~ed from price data. Fin::rnciaJ analysts typically rely on third party lssessments of bond default risk since prices otherwise lrc so closely tied to interest r::ltes. 11 The SEC also proposes that all performance d::lt1 be printed in the samc size type wh:ch must not be smaJlcr that IO-point type. This requirement is likely to increase clutter and <thus make ::rdvertiscments less eff:::ctive..-\ more attr::tctive altcrnative might be simply to require cklrl:, legibl::: dlsc!QSUres. 1::
C. A disclosure distinguishing perform::lnc~ me::lsures th:u in.::ud~ :lllowance for load ch:lrgcs from me:lsur~s th:lt do nOL :-.I:lrrowly focused dis.:losures of this type '::In be :In :lppropriJ-te m~~;:s of :lddressing consumer misunderstanding. [I' the SEC finds empiricJ-! - evidence that investors do not understand these :lspects of mutual funds. :lnd determines that the proposed disclosures :lrc :l cost-effective me:lns of correcting the confusion. then m:lndatory disclosures might be justified. l8 III. SU?v11V1AR Y The SEC proposes to impose very restrictive regulations that would limit the advertising of truthful :lnd nondec~ptive perform:lnce claims by mutu:lJ funds. The FTC staff recommends :lgJ-inst such restrictions be~ause they would suppress the flow of useful information and therefore h:lnn investors by imposing COStS th:u outweigh any benefits. The FTC staff believes that one other :lction may, however, deserve further investigation by the SEC. It is possible that :l significant number of consumers would benefit from more widespread use in J-dvertisements of J. yield formula that takes J-ccount of the :lmonizJ-tion of premia J-od dis.:~ur.tS on the securities held by the funds. If so. twO :lppro:lches mlgn: ce eval ua ted. On the one h:lnd, the SEC migh t designa te :In :l ppropr ia te "S EC Yield" formula :lnd encourage its volunt:lrY use. On the other hand, if that method is insufficient. the SEC might t:lke the further step of imposing :l 18 Of the proposed "triggered" disclosures, we suggest t'irst invcstig:lting the conc~rn :lbout invcstor misundcrst:lnd:ng of the risks of prep:lyment and of iluctu:ltions in the value o~ principal of U.S. guar:lntecd mong:lgc b:lcked securities. Thc SEC might consider requiring th:lt usc at' the term "gu:lr::J.ntcec" in :1 rclc'/:lnt contcH in :In :ldvcrtisemcnt t~ ::l-:comp:lnied by 3. simpk disclosure concerning thesc risks. 13
· rule th:lt :ldvertisemencs of :lny other yield Cormul:l by In income Cund \'.J~i-: trigger J requirement LO disclose the SEC yield in :In :::qu:llly prominent 1-1 \A.. .., .' - ~
Appendix .-\ Private Publications Regularly Cont:lining Investment Company Performance yleasures The FTC staff surveyed business and finance publications to establish which regularly include their own or commercially prepared performance measures for in vestmen t cOffipanies. 19 The list appears below. Thosc general circulation publications that include risk measures other than simply a time series of returns are shown with a star. In addition, several investment data services produce and sell risk estimates using various techniques, measurement intervals, and time horizons. Publ ica tion General Circulation: Business Week Changing Times \foncv· Forbes Dunn's Business Month Barron 's Fortu nc· Consumer ReQorts Estimated U.S. Circulation~:J 763,000 1,385,000 361.000 705,000 284,000 275,000 681,000 3,000,000 l~ The ICI provided help in this search. ~o Source: Thc S,:1~chrd P:::riodic::l1 Director\" 9th Edition. 1985 1936 Publishers of \10nc'.- .1n..! 13:1;;on') indic::ltcd that roughly 4o"'() ot" thc:; subs,:ribers 1re mutual I"t.:n..is :n\cstors. 15
Specialized: Pu bl iCJ rion lioDer..l..nJlvtiol Seivices Weisenber'Zer Investment Companies Growth Fund Guide Mutual Fund Chartist Donogh ue's Yfonev Fund Report Johnson's Investment Companv Ch:Hts Monev Fund Safety RJtin"!s Mutual Funds Guide (CCH) Handbook for No-load Investors \-foodv's B:lnk Jnd Finance Yfanual Gordon Yfarket Timer Mutual Fund Investing No-load Fund Investor Switch Fund Advisory Teleohone Switch Newsletter l"nired Yfutual Fund Selector Vickers Facts of rhe Funds 16
Appendix B Current Advertising Claims That \Voulct Be Rcstri.:ted By The Proposed SEC Advertising R~guf:ltions The FTC staff conducted a review of in vestment compan y ildvertisements ilppearing in the press to determine what types of current advertising claims the proposed SEC regulations would ban.~l The publications searched in this process were The \V1!1 Street Journ:ll, :vrone·., and Forbes. Each of these publications has wide distribution and the latter twO public::uions carry their own investment company performance measures at regular intervals. This indicates that there IS a market for this information and that subst:lnti:ll numbers of potenti:ll investors :He likely to have been exposed to the advertisements that the FTC staff reviewed. T1ble I records the observations from the various issues of Monev and Forbes. Table 2 records the observations from a colle:::tion of :lll of the aCtu1! performance advertisements that appe:lred in the W111 Street Journ:ll over the period from October 15th to October 31st. 1986. with duplic:ltes remo'·cd. These :ldvertisements follow t:lble'" :"ione of the ;:>ertorm1n..:c advertisements comply with the SEC proposals in all respects and mos, 01' the advertisements contain information that would be banned, The advertisements with forbidden information have a star in the upper right corner of the page, ~1 The 5t111" of thc ICI providcd assistlncc In this task. I';"
T:lble I Count of In\estment Comp:lny Ad\~rtis~ments Sf:1king Specific Advertising C!:lims Th:lt Would Be Banned By The SEC Proposed R::gul:ltions no. of ads. time period greater than 5 years comp:lrison to broad index performance r:lnking based on 3rd party c:llcu 10. tions gnphic:ll presen t:ltion maximum :lnd minimum price over the period se para te re ports of income vs capital gains compound :J.nnu::ll return :J.venge :J.nnual return consistency of gains over time Monev !Oi86 42 13 7 2 2 5 3 Monev 8/86 40 .., o .., o o Forbes 10/6/86 2 o o o o o 18 For bes 8 30/82 3 3 2 o o o o
Table :; Count of [nvestment CompJny PerformJnc:; ...l,.d\crtisemcnts \hking Specific Truthful Advertising Claims~~ ThJt \Vould Be Banned By The SEC Proposed RegulJtions Wall Street Journal, October [5th to October 31st. 1986 equity tax-free income income corp. cash no. of distinct ads 21 ,... 14 I .? time period greJter than 5 yeJrs 14 0 0 0 comparison to broad index 6 0 0 0 performance ranking based on 3rd party calculations 3 6 12 23 0 graphic:lI presen ta tion 3 0 0 0 maximum :lnd minimum price over the period 0 5 13 0 separate reports of income vs capital gains 0 0 0 compound :lnn ual return 0 0 0 a verJge annual return 1 0 0 0 consistency of gains over time 3 0 0 other 0 0 0 124 22 Re::ldily verifi::lble. Claims :lbour bond "quality." Statement of short tcrm yield for :l non-income fund. 19
Equity F~nd - Average
THE WALL STREET JOl"R.'lAL WEDNESDAY. OClOBER 22. 1986 59 ~.
For capi,al growth,trGnsfer
your IRA to Bull &B~r.
Capital Growth: it's the name olthe ga.rne in
IRA investment. And it's the fund ~u should con-
.~ider when Iransferring your IRA.
Throu~h bull markets. bear markets, three
presidents and it tece.~"lon, the Bull & Bear
Capital Growth Fund has avera~ed exactly a 20%
retum since 1975. Thai's 708.8%1
Even thou~h share price and re!um have var·
ied in the past. as they will in the future, Capital
GrOW1h Fund IRA holders have en!O'J"ed this suc-
cess throu~h Bull & Bears single·minded ad·
herence 10 a successful strdlegy ol i~tment.
There arc no commissions or redemption
fees. e'w'er. 'The minimum IRA investment is only
$100. And ~'11 c.ven do most 04 the transfer
pape1WOrk for you!
20%a year
since 1975*
Capital Growth Fund
1-800·847·4200 ext. 518
.'illl
11 Iian~r Square. N~ Yor1< "fY 10005 GROUP
Please rush me 1'TlQI'~ l.:Umpll'll' infOfmallOIl dbcllll Ihe Ijull & BeM Capital (;(()wth
FUlld IRA. Ill<'!udlnll a I-'TOS~US wtlh r>crformall<:~. char~s and ~xr>cmes. I'll
read It carefully be/ore I i~st.
Name '(",a,'VUIUlC1 annlld!
Address ~Unl ~ 11lJ7'j
. M'lC1 G/3(}'86.I\.'I.~ITl(:,
Cily 1t:1~lTll.'flI()lali
Slale :Lip caDll;\1 Ila"'~ u'S!tlhu·
I I )'\casc send Kt."ll!lh informallofl. !Jun.... am d"'I(k.~Ki~.
THE WALL STREET JOt"R~AL FRIDA Y. OCTOBER :4. l?SiJ 57 *
I:
I
I
MoSt people agree. * For more infor-
with the adage' 26 0<M mation, mail the
"nothing venrured. 0 I coupon. speak with
nothiri2 gained" + I your financial ad· .
until it'Ts time to in· ...VERAGE ..... "L'AL RETL'RS I visor or call .
vest their money-when sud- Oppenheimerat'1.800-Z22-0700
denlytheydevelop an aversion to! (in New jersey, 1-800-222-0755).
venrurimz. Such reluctance can: Because if your investment
deny investors the growth oppor- i style is moderate. your rewards
runities that Oppenheimer's 'maY be tOO.
Taroet Fund has been taking ~ r- -. - - -:- - - - .......1
e _. I Opp~nn~lm~r Funo Mana~~m~nc. inc
advantage of for over hve vears.: Two Broadwav. ~~'" York. ~Y i0004
Aimed at capital apprecia- ; !:::i PI~ase send m~ a Tar'i!~~ Fund pro· i
tion, the Target Fund has . I sp~ctuswlChmorecomoi~telniormaClon ..
- . ,ncludm'i! all char'i!es and expens~s.
rewarded venturesome Investors' (wtll read Ie car~r'uil\' before i lnv~st
with an impressive total rerurn . i or send mon~v
of 273~.. ,: since its inception~ Or
a 26.0c.: average annual return. ~'.;""·a-m-e-----------
All irrakes is a minimum of '
55,000 and. of course. the : I Address ,.,.
understanding that net asset !! Cit v ~."'" ,.~. i
values fluctuate with market I I .~ I : State Zip
conditions and are subject to I
loss as well as gain. ; L.iho~ ..!£ W~"l~ -'_1
i ~=§·;tml=t!i'i1«!laD!JImJ
i "A.ssuming a S10.000 investment at offenng pnce on 1/21/81 heid uncI! 9/30/86 With
Iall diVidends and capital ~atns retnvested. See prospecrus{page 2) for tnformaCion on
vearlv diVidends and capttal\?atns Past performance IS not an tndicaClon of fut'Ure
I resuits 1; 1986 Oppennetme-r Fund ManalZemem. Inc.
THE WALL STREET JOl:R.'iAL FRIDAY. OCTOBER 31. 1986 67. ¥
W hile it's ine\'i- 15 49t* I Jecr ro loss as,well as ;
table that the 0 'gam, drverslncatlon !
. stock marketwill con- within the Fund :
tinue to go up and + II helps to reduce risk, :
down, it,'s not inevi- ...\E? ...GE~SSL:AL RE"iLRS For informa- '
table that 'lour blood pressure I Clon on this fund. please mail
has to 20 with it. i the coupon. speak with your
Considerrhe Oppenheimer: hnancial advisor, or call ~s at
Equity Income Fund, ! Oppenheimer, 1-800-222-0700
A conservative srock fund ~ lin New Jersev, 1-800-222-0755) ,
which over the last ten Years, i ~ow YOU can take advan-
despite all the fluctuatio~s in the : tage of the market without the ,_
equity market and inn'rest market taking advantage of YOU,
rates. has pro\;ided investors the' - - -- - - - - - - - - - - - -. \. )r-~t:"~!"'~!m~r F:rnJ \.1.ln:lCt:"~C"~~ ;0:
not-so-conservatlve avera2e 7",'Or,'"w"',,,' "-'''' ,;"" '-"", ,;", ,.'''"
annual return of 15 .4~/:~;': - :: r"c:" l'f:' 'C'~tJ m~ .In :':.JUlr\ : o t."drrlt;> ~trn~
This has been accomplished ~""l'''':::J' '" ,rr "",.or., ,)mC".,: ,'" 'r··,.", ,r,
:n.... ll'Jlnq Iii :~;)r£~, .,t"l~ C'.'\~~~<'("" ..\
bv investine in hien-dividend- ," eJ",ui" "",,,r,,, ,nv",. or ",nc: -ro,''''''.
paving srocks, mo-sriv blue-chip, ! :
and in bonds. I' ',' :"",,------------ , '
Thus investors have en- ',,'me ' f
joyed impressive growth in the I A.;jdre,> __ : l
Equity Income Fund- a growth c,,,, ~
augmented bv dividend income.! ' .
And while the Fund's ' ' StJ[" ZIP . ',,,, ,
share value wdl fluctuate due to iI P"one ~ ~
market conditIons and IS sub- :.-E~W!.£I~I~ ::- I
i ~~:
°Assumtnq an In....estmenr ar ofie~tnq pnce on 0·30.'70 neld Idntd 9: 30. 80 ....·Itn di\'1dends
and capital gains retnvestec, Se'! ;mspecrus I P )1 ror mtormanon on veariv diVidends
and caoltai I!alns P3sr :,~~;nr~ance ,s not 3n mdlCanon or- ruture results
t !9s6 ():;;:,ennelme~ ~unj \lanal2emenc.[nc
" .-.-." ., .......-: :" .. ;,-.'- ... ~- ... --_.,.-~... : '/ A The New Manhattan Fund OBJECTIVE NO LOAD No sales or redemption cnarge MANHATTAN FUND INVESTMENT MANAGER: Maximum Appreciation Neuberger & Berman Management (SiDce 3/1/79) RESULTS. Average Annual Percent Increase: 22.2%* Total Appreciation For Over 7V2 Years: 357%* '~~OM MARCH 1 197910 SEPTEMBER 30. 1986 ASSumes tne reinveStment ot all Olvloenos r-------------------- -~I ;:O''!ase sel'c ·""e a"~ oro~oec:\JS ana flnal'c:al Neuberger I ,,!oor~ snow,I'C l"Ian""artal' .-·~nc S oorl1OIlO anc I :le,'or"'ance "::5:0r'l ·,ear :;y year ! ""II reaa ·1 &B I I ·:arelUII, oefore 1,r,veSI Set"a ~c ""oney erman I I WA,..Ac.Ewe .. r :"'c ~ I ..~ ...~ ServICe Center POBox ~299 I I BOSIon Mass 022' 1 I "OOrn. _ I _ Call loll Iree day or night: , I I c." 51a1__U 1·800·922·3700 i I L J
Equity Funds - Cummulative
FRANKLIN UTILITIES FUND I A~;~~'S I Poweryour I : Portfolio With ! 339%: High Total ReturnsI ----¥ ?!c.u.t Soend :1e I. ;:l~ CCDtl.UU..aC mo~ :.oa::.~.e~ ~.. , Jl:o~ooe. :JlC;=~ :~ ..ad eXPe~_. i "I!I ~.,; :ud It ::ue~.ti.'y Ile!o", I t:Yesl or ~d ::o~. . . : ll:l ~ ~te=~ ;ll F:aUl::: s· : lRA''',' : a== Re:nce:t p~ ;Ulc;:IOes ~I Y'· . Cz Franklin has achieved high total returns from a dive~iiied portfolio of growth utilities. The Fund's goal is to provide i.ovesto~ with hIgh current i.ocome and caoital aoorec:ation. While put perlormlJiee is not indicative of brtnre growth, div· , idenda hAve increued every yreu : £Or the put 12 yu.n. I Fi.nd out how to get more (l~am. from utilities tiwl ~-------- ~' -"I4.-ns '7ow ro-..ltIl ..... ':.tIl yun ftIa.d 1..Jr .... ::-=-:~-:,-- _ JI 1936 .r..r &II QUICUlld I.. -.,. UtTI Sc.Itoi Zi4> ~'::."":~:' ...-.!!~ ~ .. 800·255·7710 ~~::"'~.~~ F RAN f( l I: Ni En. ~81IIMAC ....... pnan
-.
',:'
.....
~,1•
800·255·7710, en. 411
;~u...x.1i,r. :r.C:H!~! F....;n:
~oo ;:~_~ .... v.~~,
~t'&'!''Jnt :'f""!. ::::':
P~:J.St se~: .l :;,,~sce-::·.:.s .::r.·~::'I::Z ~.:;"~
::r:-::;e!! ~~::]~auor. ;~c::..::~~ ::-..l:~!'S. .a,t.:
!.xOot~Sts. : '&'t".. ;"e.d H :4.!~f',;i::.; ~:or! : :!': .... ~~:
'Jf stnd :':'loney
! I.tn lI.iso lnte~sled In r:'V"•.x,un s
:-: ,~A
: aU~ln.s~ R.~tn!Tl.nt P~o.n hnc!ud.~ K.,;)~n:
If your tnvesune~tS aren': beaQng stOCKS.
bones. ane :.'e cost oi uVUlg. 'IOU rt losrng
qro/,;M.
Consllje~:.~e ?ra."~iti;:: [::cou:e ?·Jnd. 'Nhose
totai ;:~u~ of ~ 7:-~~· for :'1e :ast is years
c~~e~·:"ol"':':e~ :.~e :Jr:=a.:.ag~c se~u::::~s :~
aexes a;.c =ore :.~an ice;lt oace ·Jt1!..1 !dat:o~.
Of cou~e. ::::S ·..·as a pe:"'.oo oi ge::e~J.L:;:-:s
:~g se:'..:::::es Pr':c~s a:::: past ?e;:c:-::.l.~ce :5
~ot.u: !r.::CJ::or. oi fut\U'e resu::s. St.:J.:: ;
':lce :0 ao?' aoo;.;; an :.1coc:e fu::e :.~at :.lkes
aO·;anu.ge oi iug!l Vle:e:::g ~
S:OCi(S .:znd bones :0 glve you a I R
be~e:" :ot.a.i :-e~::~. Find ot,;:
Qore. ASK ior a i~ee prospec ( ho ....,·
:'.lS ~ocl.1y.
-.,...&.:r·J'f';~~!Y~U'\~..e~ 10 ~¥t~""';''\Al'f"UIGI",",
"'~-:;;"l~ ~r_~f'1,I.~~·~' :MGftHlS .1 ,rt~:".l '!"let "" ~Ic.. C~
~MnlhA.lOll''''::'':r' ...Nt ........, ~... l. ~.;..a.. '.""' .l\oIII.l.r....
".~'C" &lie s....c:OI" 'f'O':.,tn "1(1l (,'&lU(.~':' __ .,.... ~
~~14t:'l· -, :: e,--:\
.~~~ . 3_~ .»...ao' "'\Aut.tou ';;.,
-':>ow;oJt.....,c ... ;."':~.~.t·foc.. ·' ... :rf':\~f"""!"I'::aGf'SoII.oi :.':1 S("lte'Z:: ~ .. '11
I =='::'~~~-;:::;:-;::~~~;.....J,.,..':.',~.Oft.\v:,~~c:: ......: 0' .;.~ : It' ; ._
~ :~: .,;.:":...:~;.-:"': MemDet $29 Billion FraNWn c.ro...p of Funda .h ·Ut. '~~~'.;,;:: ~...~.. :....
. ,,;~
~:rHE WALL STREET JOl"R:-.lAL THl'RSD.-\ Y. OCTOBER .10. !986 T. Rowe Price International Stock Fund The International Stock Fund has delivered an impresslve 21?"'o total rerum SlIlce Its incepnon In lYSO including a 75% return for the 12 months ending 9130186~ Our investment man.agers have ?TO\e~ themselves in up and down markets. and in periods of strength and weakness for the Amencan doUa: Benefit from investing with intem.tiotl4l ex~rts The Fund invests in some ot the world's fastest.growing comparues. primarilv in Europe and the r.3cr:,,: Basin Our team of lIltemanonal e~rts manages the Fund to help you benent from both ;:aOltaJ grO\\:~ and favorable changes 1Il intemarional currenoes. And. because foreign econorruc cYcles tend to cure; from those in the L'.5.. thiS Fund oiiers you the opporturuty to diversuy your investments. No sc.les charges! Tms hlgh-periorrning Fund mav be an excellent chOICe if you can assume the speeaJ risks or U"ltemanonal lIwesnng. The minimum tninaJ lIwestment 15 SlCOJ (S5C() for (RAsl wnh no sales c.h.uges. For iniormanon. call weekdays 8:30 am to 8 pm. Sundays 10 am to ... pm EST 1-800-638-5660. LRowePrice~lm.:est VVith Confidenc; ~ T. Ro_ ?nc~. 100 E.lst Prom S~!. 6alllmon!. \<1021202 5.>110 a pt'Os~s '..... lth more complet!! miormanon. ,ncludl!1~ mana~ement i~s and other charges and eXpl!nses. I will read il carerullv berore I Invest or send money :: !' m also Interested In Intemanonal bonds. Please send a prospl!CfUs ior your Int~manorW Bond Fund. (,r.' _ H~ :- Bus~~ . - ... ! : _ .... : "',as ~a,r-!,: 2: 7~·: .~:- "':e:~,,:.·- : ;.,~::: ; 3C 36. at"': 75;'., ~;:t'""' ..;, J,C, 8: :.: -; ;C.5C ; li~(es ,""c:_~e :~ai se~ ... :~.-::~ .~ _:- ... : .. ·~!,.,=s ar: :.aC::a1 ;aIrs .:.S~~ : _: : -; - ~ :a~e ;. :" ::-·e Scare-!'-! :' ~c=;~;or:al In'~r~.a(!ct"' ,~.ark!! :or.C:tlcr-$ ':'~"::'...~:!': ar : :25: :-=""':' - : - .;. f"-:;·:,a!""e -:.....: ....'~ '!S..... :s . .,. ~CW"? :~':! ,r .~S~-'!,..~ Se.....",'=!s. Ire.. Ots~r:c:..~or
fbI KeogM, think Magellan! Fidelity ~agelliln Fund is the choice of m21lY seif-employed and incorporated individlU.l.s. And no wonder-it's up 286% over the past five ye2l'S! While past performance is no guar- antee of future results, you can start with just S500 for Keoghs. And deducr up to S30.000 or 25% of earned income e2.ch Ye2.r. • 24 hour toU-free service and exchange· Expert fund management ~.:... ,~.SlOW mum for tht past S veus md.l!d 91~186 tndudes clwl~ ,n / v -----.. shan onct. lilt mnvtsUlltlll of.u div~ds UI(J CUlIW DllU di3lnbuuons. 'teeD''' 2lld til.'r dftcl of Int ;'4 s.;Jes c~. StoCk matSe'! conwuons ...t!'t ~tr'l 4Oeq........f' lIIv YO bullluC'lUaltO "'ldeIy rrvtr t/lt pmod snown. Fi~rt up<l.1Les t/lt 40~ ~;"/)e Fund S p~OtctUs ~ ..rho/.' Fidelity Magellan Fund Keogh. For lllO", COCIIoltt.t Uliorm.won. L1lCludl~ ~ent fees. ~~5es. UI<l tht ;% sales ~. CIiJ 0' ...= lOQn ~ U-a 'IOU 1M FicltilfY l.tul't"lDtnt pllII txt X,llllld • tree p~s. lesa II arduUv brio", "Ou Ill_10' -a me..... Fidd1rv OisrnbulDn CottlOn.tlOn· ~ OulMbuoon ,~!tlll. ~.O 8o.~. DsI1u. rx ~S2&ci . .u.o ........ ~... ~lJ.A. Call toU-fre< 24 boun. '. ~ Fidelity I!:~~~~4jUtcl~'~§9'9 InveSJE'Stments w nMGK/' 02888
may be the last ta,."I( year you can
take advantage of your IRA deduction.
\Vhy not put it where it will benefit you
the most?
12:.~ 1--; 6.- :'0, &)
o 0
_).rrn~,tr4:a
' .
. "
.'iOTE: Th~ ~Cer'lr.og~ P"'~ r~eCI the re-tn...~tme1'l( oh.tl dl5tnbu\1oru. The 10 ,., "e:u
penod ""as s.elt"{;ted 10 compare th.. reco... en· of2 Wlde!Y iOUowe-d bur unm2.n2.ged ,no<;:<
Wllh Ch2.1 or the prore3.Slona.tly mazu!leu V;lJue Une Func:U. Past periormance '5 nUl
,nQ,ca\1ve or tulure resultS. xe prospc:CIW for turther del.OJls.
Value Line gives you all this plus
three bond funds and a cash fund
and there's never a sales charge.
~,
'.,,.
\
~.
jj
For more complete Information. including m:1n3~ement fees J.nd ex·
penses. call ur WrHe for \'&!ue Lines free I R.... Infurma!lun bookJer JnJ J
fund prospectuS< es). Re~d J.11 matenal carefullv t>cfore vuu lOVeS! or
send money
CaU toU-free ...
1·800.22~0818
. [Junnlit :\ew 'Ii>rk bUSiness hours.
OeOL 8F62AL
. .. or write
~ue Line Securities. Inc.
~ I 1 Third ."venue
~e~' York. :"l"'( 1DO 1-
..
~
l==:=========================:::";
64 THE WALL STREET JOCRI"IAL THt'RSDA Y. OCiOBER 16. 1986
FIDELITY
INVESTMENTS
CaJI toll-free 24 !loon.
1-800-;44-6666
~~~~.l,~~m~~~~:!~~~.~ 1(~~~~~r-~~(;UI~I~~7.::, .
~". 'JIt-' rhal'\:l' call "r ""nfl' lor 1 m'l: f'l""f".'l.·IU, IlnoJ" romulll t1('io,,' '''\.I In\t~'
fir 'l"flll milO(" Fttld,t\ llNnhulo" C"~I"'JI"'" (~'rJIIl,,,,nhullf'" ~C',"I ~ll t',oo,
hi>iM>iH IrJlla, 1'\ ~~~hi"
"I~ con~jdu Equi~-In~ f(W ~r 11A.
The Pension fQr I
Manager's Choice ~gfJ3:..
Fidelity Equity Income Fund is tM choi~ of 620 pension
managers! .-\1ld many self-emplo~ and iocorpor4.Ied indi\,duals
choose it. 100 :Vter ail. the fund is up 545% over the past 10 yeus.:
Ihrou!W good markets and bad. Start \It;d'1 JUSt SSOO for ~.,hs. And
deducl up 10 S50.000 or 2)% of e-arned income e:1ch ye'JJ. Of course.
p:L')1 performance is no guanmee of future results. ir---~. ___
hcurt' Jrt illr ,,,,'" l"?1um, lur III ~ I ~ill\t II ~/I. 1'1(" Ind mdudt- chanl/l" I -1e.
,n ,n'Jre pnn rt'lnle'tmt'lIlllf dl\ldt'II(.b Ind CIplUJ al~ d....nllullf~ ~nd Ihl' ! ~ ~..;
iuntl , ~":.,.Jt, chanlt' hl/urt' UJlWI~ I":Illt- ~ "I l!'ll' fund, St.aJ~rn, ,,(~ddl' 1'1 't1QI/i)e
uonallnlormallon 6'~ ..ilJ'Sf.
*I .. II" • -Equi~·lnc_ "5 54P <,()(), equ..... """'-- - ,~~, ,a PVo'l -. l~9". u,u'''''/flm''''' irr~ "'.... 10_1'1· lfyou're disappointed with your IRA results. consider transferring to Fidelity. Choose among a 'Wide val'iet\' of Funds- including Fidelity Equity-Income Fund. Compare Eqwty-Income's impressive record - up 545% over the past 10 years.' And 'WtuJe past perfonnance IS no guara.n~ of funrre results. Equity-Income has the potenr:ia1 for substantiaJ growth and arecord of above :lVer:lgf di\idends. Plus when you choose the Fidelity lR-\ you'U al.so enlo~: 2-1 hour toil-free sef'Vlce. - Convenient telephone excrumges. - Fidelity's expen management -It's easy to transfer your IRA to Fideti~: Don't deb\~ F1DEUlY INVESTMENTSWSJE/PUA!t102.86 'amt \ddres.s ....::;;:--.... Fidelity Equity-Income Fund IRA. For mort complttt mf0tTl12110n . mcludln~ m1022emtnt lets. tx~ and EqullV·lncomt s !% S4Jts ch2~t, c2il or "'nlt for 1 ll't'e pms~us Rt2d II orttullv ~iol't 'll}U InYtsl or ~nd mon"- Fidthrv DL~nbulDrs Corpol"2uon: Gentl"2l DlstnbuUOIl,~enr. PO Box O6OOO~ ..OaJlas, TX :',200. Cil\' SuIt Zip _ Cheock h~ (or ~ iollov~ fact lUI =t EQl'Jl) Check h~ (or ~ Kt1>giI fact kil :: (EQrK) Cau toll-free lit hours. 1-800-544-6666In\tas.sachU5ellS call coUect 61-·;23-1919 'TOWl'tNmS for tht S&P ,00 and Eqult\·lncomt for tilt ~ ~ tnded 9/30186 mctudt Ch1O~ts ,n shut ;mct and tht l'tmvtsuntnr of UI dt\1dtnds and C2pltaJ ~ns dlslnbuuons, Tht total rtlurn ior EUUH\·lncomt ilio mcJudts tht ~tct oi~ funds 2'\ saits c!UtR uo<l.2Dll( tilt oroSotClUS :)lock muktt condJuons ""tl't 2enenilv up but RUClIUltd W1detv ~r ~ ~nod.s ~n .s&p ,00 IS J rtlUSltred tndtm2rX oiSwllurl! & Poor s Carponoon.
;,f..
\
;
, -
Fidelity sets
a higher standard.I
\.
I
1n lhl:' 1;1.'1 II) \ t'.Jr'- hdl:'ltr\ ~ EqUlI\ ·1 nCIlOll:' Fund h:.L\ prllllded rt'lurn, 1\\ () lImt'\
hl\:her :h;.tn ,h;.tll,l :--wnd;.tnJ Ii. PI K Ir \ 11H I . ThJI nWJIl, S1O.0'H) 1fl\l'\Il'Oln Equtr\·
In(On1(' !l'1l I l'Jr'- ;.t~1l III Julo he II Ilnh ~(~. 1-;-f I H IOI.1:JI
\\ hilt' P:.L\I pt'rlllrm;.tncl:''' no l!uarJlllt't·Ilf future rt'\ull\. ihl'IIICllmt'-f.nentetl
,lock funo h:.L\ OI~[lI;.tlt't1 UII1\l\It'nl r~:rtomlaIlCt'. dt'\pne m;.trkellluc(\Jallon,
Flir morl:' 1IlIl,rm;.tlllJIlIU\1 m;.tliin rht' Jrt:!chtd ClJu()<lIlllr (;W Ilur (olJ·irtt' numhl:'~
~ .. hour::; a cia\. \tll\lmUmlll\I.~lmelll ~l.Il1HI. ~){1I1 tor IR\ \
h-.:u(t,.. .1ft' Ill' Illj~J n'!urn .. /I,( III \C'.'" I ('flU 1m.: q .wI ~" ~mJ 1lM.'hKH: ~n.ll1\:r III 'H;.&rt.' :tnlt" n'IIl\"";lI'l"lIl
"i \iI' IU~'IlU" "IIH.l l"J.nllJ,1 '.;:JIII' JI'lnnulI.w" JU" lht, ;UftlJ .. ~.. .. ..k.... \ 1t:.lJ'l:t' h~un'" Up'U~II' t':.u:~' '" Ii lnl" 'lInt! "
:'fJwm('lIll1f \\lulllttll.6lllliHn'1I.W"u
"".lIl\J;JrU & "', •• , " :'1111 ,.. J IfJl.h'm;J~ ,,{ 'fJlIWnJ ~ fluur ,luf'T!",rJlJUH 'J \\uJel\ 'M"t""':IIlIt"d
UllnlJIlJ:':I-U IlI!JI-' ,,' ''''I,'' fll,1r"'-t'llkf'h,rflIJII\t'\ ,--:..r,~
.. ~~
Fideli~' Equi~·-Income fund. h,rOl"r~ '''0I0lt-1t" all"rT1lJ '---..... ~ ,.
:11111 :lII..1UUIIlI.: ;11JJ\Jl.:l·~ll·'lI ~lT' t"'rH:II.'t·~ Jllli J. ~ 'Jjt"' ""HJrct.: 1111 t.l,H.;li. ~i:
Ine"OIl" (JII "r .• rll~ r"r J rrrt" nn"llI.'C1U~ Rl-JU II \Jrl"llIliI h"'"rl" \lOU "1\ t"'; "r .t",,,J
m"n," hd~iol\ 1l"'rtOul"f\\."'1"''''JIU'" 'lll'lll'rJJ Ilt,tnhuu,,,, \~l'IlIJ I'{) I~,\ "ull\>ll;
IJ:JilJ.' 1"\ -".!I>4' ~
Calltoll-fr« ~-+ hou~ Fidelity
I 1-800-;44-6666 Investments
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48 THE WAU STREET JOl'RNAL FRIDAY. OCTOBER 24. 1986 ~ -=========================.""1 . . . ntroducing Europe and the Pacific Basin Fidelitv offers you twO eXCiting new funds that let aggressive investors focus their search for growth on spedfic regions of the world. New! Fidelity Pacific Basin Fund. Japan. The Far East. Australia. Just a few of the exdting places Padfic Basin's managers seek aggressive grow1h. New! Fidelity Europe fund. Tap the potential of Western Europe's strengthening emnomles in France. the U.K., West Germam'. Italy and more. Or consider Fidelity Overseas Fund for a more diversified approach. It's the nation 5 # I internationai!und over the past year. up an impressive 100% I. Of course. past performance is no guarantee of future results. but many Investors look to Fidelin' for experienced internallonallnvesl' men! management. • SUrt with just S2. 500 ( 5500 for IR.\.S)· Exchange among more than 50 funds' 2-t hour lOU·t!e~ service· Fidelitys professional international management and Investment rese:uch • Ui.I too.a\·1 .lUnkN bv LJp~r \nalvucal ~l'\·,ces. Inc ...hlch currtn!h' monllon OV~r H Inl~rll2Uonal lundS ior Il mOnlhs t1ld~ q..10i80 TOlal t'ffiIrn lor lh~ ~nod tnd~ 9, .IOogb lnclud~ chantt ,n shart pnct. ~nv~mml 01 dl"dtndS and cap,uI £aIM dlScnbuuons. 1nd tht \-. sal~ cha~t upd2l1n~ ~~t , Ollh~ proS~IUS Tow ~urn ior tne hie ot 1M fund U ... IS. 10 q, jQ, lSi> IS !OOS' ."hrVl conditions ~~ &tft~ralh' UP O'·tr tht :)t'nod Citv SUle Zip _ c: Fidelll)' P1dtic Basin (PM) _ fidelilY Euro~ Fund (EU) =Fidelll'y Ovenns Fund (OV'E) =Fideliry lIlA (OVEI) =Fidelity ~ (OVEl') Fidelity's Overseas Funds. For mort Inlornnuon. ,"dudin~lIIan~fft( fts. t:qlfnse and 34lllliab~ siJeJ~puon ch~. all or "'nil! lor 21rt1! pro5(lf'CtUs. Rf2d II ~Uv belort you ,nvest or sm4 1I1011l!". flcldilY DistnlIu(,[)rs CofllllntlUn ~enI Dtstnbullon A~nl. P.O. 801 ooOt,(lj. DalW. TX 7S2bO. 'ltme ...~ _ FJDELITf I~V£STM£N7SWSJEilTNI102486 Call toil-free 24 hours 1-800-;44-6666In 'l~chu~lt~ call collt'Ct "J' ,~; :(J I'.
· 58 THE WALL STREET JOL~"iAL WEDNESDAY. OCTOBER 15. 1986
Fidelity Overseas Fund is up an impressive 100% over the past year~
making it the nation's # 1international fund.! This aggressive stock fund
taps the potential of foreign markets- and that can mean more growth for your IR-\.
Of course, past perlormance is no guarantee of furore results and the Fund can
be volatile. You'l1 also enjoy:
• Easv IRA transfers
• 24 hour service and exchanges
• Stan \\ith just 5500. Call Fidelity ~
'T()QJ l'!'lUm for che penod endeod 'lIW86 tndude c!wlce ,n 5lIare pnce. mn-es~ of~. C!lruJ DIns dislnbuoons
IIld che ~ ofl!le 3% S.3le dwllr. upd:aII~ l!le fUllers pnlSllftlU.S. Toal mum 1* 0( lund {11.·~a..10 9/ )01861 IS !OO~~
'Ranlled tr< up~,~ 5eMces.lnc.. Milch CUtTl!lll/'r monllon ~ 32 inlmWlOn2l funds fnr I! mnnth.~ ended 9' \Otl!6
Fidelity Overseas Fund IRA.For more comlliele Jnfomwion.lIldudmg ~
menl fees. ~and the 3" sales C~. oJ.I or ....rlle for 2 fret prospecIlIS. Re1d il omuuv beiore YOU Invest or send
~ flde!ity DlsaibulOl"S Col'1XlnDOfl: Goeneral Oislnbulioo Agent. P.O. Box 000603. DalW. TX ;5266
.'twne Address _
Cll'f 5aIe Z11l _
.uk IbocIl DOn-IRA IllYestlnl. tool
Call toll-free 24 hours.
1-800-;44-6666In ."iA c:ill coilect 1-61::·;23·1919 ~EJ~/'01586
58 THE WALL STREET JOCR:-iAL TCESDA Y. OCTOBES- ~l. 1956 ear About Overseas nvesting Fidelity Overseas Fund was the nation's top perfonning international fund O\'er the past year-up an impressive 100 ..+% I. Of cou~. pasl performance is no guaranree of furure results and overseas investing can be volatile. But if you' re looking to r.ap the potential oi groWIng , foreign €(onomies. consider diyersif!ing your portfolio with O\,erse-JS· 2-i hour toU-free s€nice • Fideut\"s experienced international portfolio management· Exchange :lITIon~ more [han )() fund..., • Start v.im lust 52. ;00 (S:;OO for fR\S) To learn more aboul Overseas Fund. c:ill FidetilY ta<tIv and ask for \"Our free cJ.Ssene upe You 'U hear first-hand from Fidelity's managers how you can re-Jp [he pOlenuaJ rewards ()f m'eN'·.lS investing ..\Sk aboul our new FidetilY Europe fund and Fidelity PJcmc Basin fund. WSJE/~/l02'86 Call toU-~ 24 hours 1-800-544-6666In ,"1.\ cail coUect 61 ~ ·5l5-1919 IUnk~ th L/p~r In1J\1,,1J ,",,"'ICt" Inc "h'cn rurr!'1lcl\ mUM",", ''''..,. \! 'nl~m311"n;u fund, Inr I! "'''"In' ."Ol'd " Ill"', fouJ rt"fum fur :nt" Pt'no~J eonat'd q ,0 ~) InctU(J~ ":['I6nct ,n ,n;lrt' !'\flCt,- rtlnH~·'tmrnt' 'f dJ\ Idr-nd... J,ftd ~ J()Il;JI ;':Jln, dl'lrrnU" " tHIn:" lna fhr .:,11 .. ,...Jt""o ch2r:t 'JCKbunc: P12t -\ Ililht' rn"pt1,:IU~ TI;c.aJ (t"um ior tnt" !lIt' Iii tnt' runlJ I~ I '''' ;,I'P ,,1."'lI'I' •. .r/,'·~~m~... "00 x'\, "12ri<t"I CllndIllOn., "'t~ 2tnl'f'llh up "'tf tn~ ~ntld. Fidelitv Overseas Fund. For more tnformation, mcludtn~ man:u1emenl ~ , fees. expenses and the .3% sales ch~. caJJ or wri~ for a fret' prospC(lUS, Re3d II c:lrefulh before \OU ImeSI or send monev. Fidelirv DistnbulOl'S Corporation, Genenl DlStnbuuon :\gem. po. Box WOO.3, Dallas. T.'e ;266, - 'iame .\ddress _ Qt)' Slate Zip _ '! fi~lIty Ovcneas fund (OVE) ...; fidelity IRA (OVII) '- fide iiI)' K~ (OnK)
Introducing
Fidelity Europe and
P eft B ..",s
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Funds!
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PIlLS these Fiddi/r In':lIejlts
hddl[\' III:lhL:- It t".~,\ :" 1111 L:-Il II t:l'<~l'> llll! Ull
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• ~~ hour [uU ,iTt~ x,\ll1: • l'iddH\ ~ pl()il"~illllJ.l
1I1ll'mJUollJ.l1ll~Ul;t:.:::J11tll( JlIU II IIt'>Ull\::ll ir.<.lflh
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Or consider Fideliev O"e~
FWlU, This dj\e.'"::>~t.j rJnd is one of me
n::uion's tOp perforrr.:.g Iluern:.uion:.ll funds.'
The ch:ln sho....~ Com....... tM Re:sWc.J
the' fund's imores- '"
si\'e record -'
up IJ 7.6% for
the p:lSt y~~'
Of course. [Y.l:>1
pcrfomunce ~
no gtJ:J.I"Jlltee of
furure resultS, bur
many inYe5tO r.;
look (0 fillt~r, :'0~ ':'"
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New.' Fiuelil\ Eurllp<: FUl\u.ll:lllJe :lO{\:ll'
~d fJf :-:1'1111111:': ,:,"lIllIIII\:, III h-,lIll\:, ILJ\ 1.1I\l·111-
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I)ther lUUlIU1b In Wt;,ltnl i:un)\~.,.. :ltll' :il-:i'i1\ ,\
liu:lr.tr uf the '.lurid';, 1I1\'h([lltllb..lJ t:' ""\,.I:l·,j
i Thert L:) J 2',';, ~b ch:.tr'..:e ..u IU I" >:''''': 1I' :l: lip-
!.lUll:. ;'ur the P:lClDl tla:>lIl..lJid Eun'~": I".:I:\~' 1
New.' Fideli~' P:lcilic Hasill fund. !':lC:lk
GJ.'> 111 , G1JI:;S,:,:> ~!:.:,,!.:;L~:\eh· ~"t:K '~n>ll\h In .IJpall,
~ ',lo:::J J.' H'l/!~ ~,{i1I!.:,ll!diJ, i\lJrt::l.~IIl!.::.m"r\:.,)l1'ler
~.: :·:~.:'.'i ;:~:JI,r, ,.:~d \lI:--~J~.~I:l. The J'~~c:~c B.L"i;l CJlI
f; ...;,:. (".'... ~:,": :·.. ·..:.;~I!i :'111" il:~l'r-:i~ltHJl\~J il;\l':--llll'''::
\ow (he CUnlfJ:uw k.Jluwn for its e.\peri-
,'lIce ill !ntcn~HjullaJ ill\~(illg hrillg:> :ou (\\0
I:.\citing new olerse-.l.S fum.!.:;! ThD(: hueDlv tUlllb
'\:[ ~essl\e :1\1 (':-.,or.; jlxiLS JICir "CJ.!'ch ior gowth
'Ill )\)('ltDC ~t",::' dlS.i J~e '.Iorlll, Ot LUU~, rC-;Jl)n:J.l
'UIHls c.:J.Jl be '.11;;lwe :llld furel!.:!! nl:.trf..:eL'> Oil e.\D€n-
-:!1(e Illue UUC;;':l!Ulb -!Jl bOl.h (UITCnCIL':'l :llJcJ '
rnci:'S vi :-C(unUb !3u[ Lf I uu rc '.Iillillt; to ;,:(cep(
~'~;,:wr I'l;:';"; for :jH~ PV[\:!lU;U ,Ii IU~l\:r re!\lnlS-
(01 bider U1Qe :',\0 ne'.\ func.b'
• ~l!'a~! 3"-~a"l~ /'l!IC 'o::r ~~e seve~ :.a,S ~"':llng :or.=.t86. :.a5e{l on an
a...e'agf! O~l':~ :Je r $:"...! "t S:O;2 ~ve'a~~ ~at~rrr.f :_.'~~! ~!"lIS oerlCC Has
:.l.S tears -:- ~owe :;'IC! In'Jf!S~~!~! Ser..c!s. "'Ie J;s:rIOlJlQ(
., .
"tail to: T. Ro_ Price. \00 East mn 5l.. B~ttmore, ~D l11Q2
r'h!ue send me a inoto ttUormallon KIt and prospecrus......111'1 more
complete ,!Vormallon. Ineludlng mana~ment rees and other cha~s
and ex~n!es, I ..... ill read them carerullv berore I Invest or send money.
Also send a free tNOnnanon KJt tor: =IRA =~h
Z,p
The T. Rowe Price High Yield Fund
In times like these. when YIelds on most income-oriented investments are falling. where do you look for
higher current income' The T. Rowe Price High Yield Fund capitalizes on some of the best ~1e!ds avaiJaole
by investing in a diversiiied portfolio of long-term. medium to lower quality bonds.
Aggressively maruged for high current income
In pursuit of high current Lncome. T. Rowe Pnce bond specialists actively manage the Fund. and divers tn· It
over a broad range of secunties. Although ~ieid and share pnce will varY. this approach should help reduce
the greater risks associated with these types of secunties. In the 12 months ending 101 15,86. the hIgh pr:ce
was 511.26. and the low was 510.38.
Benefit from tax-deferred compounding for your IRA
The High Yield Fund is particularlv appropriate for IR..As. where the high level of income compounds tax·
deierred. helping your money grow taster.
You'll also enJoy tree chec.kWTiting tor 5500 or more. Plus. with a toll-tree call. you can purchase, ~dee::".
or exchange among our family of funds at the then current net asset value. The mlJ'UInum Lnvestment IS :; :. Xi,)
(S3\X) for rRAS). with no sales charges. ~.
For information. call w~kdays 8:30 am to 8:00 pm EDT: 1-800-638-5660.
LRowellia:~Im.:est VVith Confidence r ~ ,
• ; %* for. 0 ~hSI " Keog::.-:-:.,.:.-- Consider Fidelity High Income Fund for the higher ~ields of medium to lower quautv bonds. Self-employed incii\ldu:J..!s and corporations Cll1 ~laI1 V.1th Just 5500 for Keoghs .iJld deduct up to 530.000 or 25% of earned income. • ~o sales charge, • 2-i hour toU-tree exchange among av.ide \wetv of funds, .~ \l,ith any bond fund. your \ield and share pnce \l,ill \"a0' For example, on 9/30/85 High Income's price was 59.16 and on 91 50 <56 it was S981. ---..... '- WSJElHIl</l 02186 F1DELITY INVESTMENTS Fidelity High Income Fund Keogh. For mort complete Infol1nauon mcludmg man~emtm fee- md e'pt'n~ lJiJ, ,r wntl' 10<1:1\. 'J,'(U send you a tree Fidehl\ ReUremtll1 PIJIl f:l(l I-JI. JJ)d l i~ pro:>Ot'CI~. Re:Jd II c:ll'eiuJh before 'ou In\'OI or send mont"> hc.leUl\ Dl'lnou(O~ u)rpo~JlJon IlJefIenJ Dlslnou(Jon \~!lll flU ~I\ ()()I)(llJ' [}alJ;I.\. T\ -;206 .-\.sk aboUI Hi~ Income Fund for IRAs. Call loll-free 2~ hOUN. 1-800-;44-6666
----------------* WSJE;HII/' 02486 FIDELITY INVESTMENTS Discover Fideli[y High Income Fund for [odav's high bond yields. Let itS aggressive portfolio of higher yielding. medium 10 10\\'ef quality bonds staftworking for you tOday! Start with JUSt S2500. Choose it for your IR-\ or Keogh and start \l.ith JUSt 5500. Plus· \0 sales charge· Free checkwriting • Easy exchanges 10 other Fidelity funds • 24 hour loil-free senice. Like any bond fund. your :vield and share price will vary. for example. on 9/30/85 High Income's price 1,l,4S 59.16 and on 9130/86 it was 59.81. Fidelity High Income Fund Fur mort cumplelt ,"rorm:mon. ,"dudIn\( m:lll32em~nt fee Uld e~ptn:;e. c~l vr "'nIt fur 3 ilft prospeous. Re:u1 II C:U'eNU\ ~j~ 'OU Im'est ur ~nd mon~: Fide!il'l Di.'ilnilulUr:. C,,~r:wl>n (~neraJ Oistnilullun "'!lent). PO 80\ l:I606Oj, D2lW. n "S'bO. CaJl loU-free 24 hOU15 1-800-544-6666 In "1:L'1.' c2JlculltCll-6P·'H-191'l .... _------------------------ I' I .i , ..c, I' • ". i ~ .. '- r : II" ~ ". ~ . k ~. , . "I I· Ii" ~. , ~ . r.·.. t~t.,·: ~~.: c._,-.
Van Kampen Merritt High Yield Fund 11.14%' The Van Kampen ~terntt High Yieid Fund offers a high current distribution rate. monthly income. affordability and easy access to your investment. The Fund invests primarily 10 medium or lower grade corporate secunues, Credit analysIs and research IS provIded (0 the Fund adVIsor by McCarlh~ Cnsanti and MatteI. Inc .. a $ecunues and Exchange CommIssion-designated '. nanonally recognized stau:mcaJ ranng organlZ2non~ Both the current dlslrtbunon rale: and the ne:t J.S.)et value wul tluc!Uate as market conditions -:hange. Si.... lland SI~12 ·.... c:r~ the net asset values on '7 i 2~/86 and 10/15i 86. ~pec!lvej): CallToU F~ and we'll rush a pmipecnJs whIch contains more complete IOformanon. including charges and e:'\.penscs. Read It carefully before you invest or send money. t~~ia residents caill-8()()..6J.3-22S2). 'Curn:nl dlSlrlbullOn rale ,,<JelerTTllnel.l b'< annwahZlnll.thc month!\' d,strl· bUlion paId per ,l'I:lre lor lhe one montn Period cndln2 Octooc:r 15'-19110 and JI"d,n§ tile n:suh rJy the ending mu,mum public Qiferln~ price for fhe -.;jmc periOd.
-------t:
The T. Rowe Price High Yield Fund
This Fund invests tn long-term, medium-to-lower qualit'V bonds. Aggressive
management h~ips to provide high CUIn'nt income and to reduce nsi<. Y:e!d
and share pnce will var\'. The pnce on 10; 13:85 was 510.41 and on 10113;86 It
was 51092. \tiru."T1um tnv~tment 51.CXXl (S:iI)J tor !RAs) No ~ ctw-ges.
For LI'liormanon. call \>eekdays 8:30 am to 8:00 pm EDT: 1~5660.
1:RowePrice.Im:est Vv'ith Confidenc; •
T. Ro_ PnCf, !CO E. Pnn 51 6.iltlno",. 'Y1D ::~:
I'1tl~ ~d :'nt I ~0f'Ct\l, '''''In m~ (omoit'<t
<!UOl'TT'lAlton. :.tIClud",~ m,nlllfTTItnt r~ Inc OInt'
,;n~ .nd ",,~n~' I "·U. ,':"lJ "ClI"fNilv 1:ot10"'
; tn\t~( vr 5oe"f'ld :"':"'on~",
.":"y::-r::;.-= =-~ ..~..::?-: . ~ ; ':. ~-= X'le!'" :a)'s ~!""Olr~ ~~ . .:; 06. :c:sc·,;;r ~r :~h-='~~: :~<: :ier .;~ar~ :.
SiC :;" A.e'3~e ""Ia(~(\~,. :::.,('1':5 [!'lIS ;,er:oo 'Has l:.5 year,; ,. ~Owe ;)"ce '''',esrr''!m Services. ,'': .
:i'Slr:c:...::r
58 THE WALL STREET JOl'R~AL FRIDA y, OCTOBER 31. 1986
%*
nand morel•
21.8%
61.8%
183.6%
1Year
3Y~
5Ye2.rS
High Income's Results
Per10ds En~ Total
9/30186 Re!urn··
Fide/I?, ~Investments
SlY,.. tIN w.Ion
WSJEiHl/1 031 Be
In .'ti:l.SS~chu5em c2.il collec: 61-· ~ 2 ~·1919
City Sulc Zip _
c:: Free IRA bet ldt (HIII) =free Keogh bet kit (HIIK)
Call toll-free 24 hours
1-800-544-6666
Fidelity High Income Fund pro\;des the higher
Yields available from medium- to lower-rated bonds.
Bur in a bond fund, high current yields are just pan
of the story- because price changes also impact how
much money you make. For example. on 9/30/85 High
Income's price was 59.16 and on 9130/86 it \\d.S 59.81.
While your ~;eld will also \"a.ry, and past perfonnance
doesn't guarJIltef furure results. this aggressIve fund
is researched and managed by Fidelity experts, whose
goal is to achieve the best overall rerum in coday's
complex bond market.
And there's even more~· \0 sales charge.• Free
checkwriting.• Start \\ith 52.500: S500 for IR-\s and Keoghs.• Exchanges to other Fidelity funds.
·24 hour toll-free senice. r_-../
/ .'--. • ~n~II~ \1t1d for the - ~ ~d~ 10 !Q. 86 '~on an Z\"ft'Ue snare On<:e oi S9 8-+. ~
'""!'oQi l"I!\urr.s o~ on l"I!ln'·e5tmenl fli UJ dl\10enlU anO C2l'".all:llnS. U ,,~ U C!l2tlI~ ,n In:lrt "nee ior Ine :>enO<1$ / ~ .
1n4lealta "I:l~( con<1JUonl rluenuled but ""!rt 2~enjh uo dUMn2 lIle5f pen~' S,,~ q
~~
Fidelity Hioh Income Fund. For mo~ complete tnform:lt1on. tneluding m2.n·
:lgemenl iec5 and apc~~ call or Wnle {or a {~C pro5peCrw. Rl:2.d il C:l.refulh· bcfo~ YOU InVe51 or 5end
money. Fidelity OiscnbulOrs Corpor2.lIon: GenenJ OimlO\luon Agent. P.O. Box 660603.02.1145. TX -5266
:-Iamc ...ddre55 _
Appendix C The SEC Proposed Tot:ll Shareholder Return Formula The SEC proposed total shareholder return formula is: Total Shareholder Return .. [ending value· amount invested] / amount invested. According to the SEC proposals, advertisers using this formula would deduct all initial load charges from the first year's return :lnd :lll redemption ch:lrges t'rom the last ye:lr's return. The FTC staff's objection to the tot:ll shareholder return formul:l concerns the timing of the deduction for sales ch:lrges. The SEC proposal attributes the whole sales :lnd/or redemption charge to the first :lnd/or I::lst period that is being reported. This may seriously distort the reponed pattern of returns over time. The simplest appro:lch that would :lvoid the extreme distortions of the current proposal would be to amortize the load charges equally over the reporting horizon. However, because any reporting period is inevit:lbly arbitrary, it seems likely th:u consumers would gcner:llly be interested in :l st:ltement concerning the method of calculation. 20
Appendix D The SEC Proposed Yield Formul:l For I ncome Funds The SEC proposes to define the yield from investment in an income fund as: Yield = [[(a-b)/c] x d]/e. "a" represents dividends and Interest earned during the period. "b" represents expenses accrued for the period (net of reimbursements). "e" represents average daily number at" shJres outstanding during the period. "d" is the in verse of the fr:lction of the ye:1f represented by the measurement period. "e" represents the maximum offering price per share on the last day of the period. 2s The yield calculation is also to be adjusted to reflect amortization of discounts below or premiums :lbove redemption value that were paid in acquiring debt SeCUflt1es. If the SEC should decide to designate a p:lrticular yield formula for use In advertising claims, the FTC staff recommends changes in amortization and in compoundin.g of the yield. Amortization: Although we :J.gree that many investors would benefit from use a yield measure that includes amortiz:ltion of bond premiums and discounts (what is known in financial m:J.rkc:s :lS :J. "yield to m:J.turitY"i. ::1;; 25 Sever:J.I alternative price figures arc possible. The elements of choice include the time period (for example, the end of the period, the beginning of the period, or a combination during the period), the offer price or the net asset value, and the maximum or some type of average price. None of these is necessarily right or wrong. Gsing the end of the period price mixes current price with historic income. If the current price is used. the income should be the expected income from holding the current portfOlio over the next me:lsurement period. This. however, raises a separate issue since the portfolio composition may be changed so th:lt the projected income is not realized. The most consistent approach would be to use the beginning of the period price. Thc quandary of se\'c<nl truthCul price definitions underlines the :lrbitnrincss of picking a stand:lrd :lnd the potcntiJi importance of pc~mitting t~C use of the altern:ltiv~ me:1Sures if :''-In,: m:J.!1agers bclic'"c that they :lrC pertinent to p3rricui:lr in\·cstors.
·amortiz:J.tion approach proposed by the SEC is notappropriat~. The amortization should be based on the difference betv,:een the current market price (not the original acquISltlOn cost) and the redemption value :lt m:lturity (or c:111) of a security.~6 Comoounding: Limiting the yield measure to an uncompounded rate is too restrictive. It would reduce the flow of useful information to investors. Investors are likely to be familiar with :lnd :lccustomed to interpreting both simple and compound yields because of the extensive use of these me:lsur~s by banks and similar financial institutions, mutual funds at present, :lnd for credit under the Truth In Lending Act which permits use of both compound and simple rates of return. Allowing advertising of both forms of yield should Cacilitate comparisons between income funds :lnd other income producing investments, and between income funds :lnd costs of borrowing for in vestment purposes. ~5 The FTC stafe recommends that the :lmoniz:lt:on process ce lppiiec to ail debt obligations in.:luding those of ta.'I:-exempt entitles. .,.,--"-
'Tllu! relurn 110 I :! 'i 10 I). ,{j so, I~cludt"> (hJn~e ,n shart pnce. rem,·t5lmtnt of d,'·'·
dends wd cap'u! wns dISInOUlIM:> Uld tht t!f~ of P3\',"~ tnt ,'~, ,.iJtS ch:ll"1!t.
uodaung lhe prospe{1Us. Tou.! ~utT1lue of fund III 31.11~ co lJ· ;/). :;1,1 "'-as "I) 'i",
\tarkel condiuons llumUll~ but ~ gell~r.uh up dunn~ the JW'nu<t
.,",---",
..-- ;; . .
~~to
~
Fidelitv OTC Portfolio. For more comolele JOiorm:llIon,JOcludin~
ntanagemeOl iees, e.\pen~ and the 5"<:. sales (harge. c:ill or "'nte for:l free pro·
spectus. Re:1d il OIefuUv beiolT 'ou JO,eSl or send mone\' fidelil\' Dlsrnhulors
Curpor:ltIon (Gener:JJ Dt),nOUllOn .\g~n() PO Bu, ()i>l)(~l' D;iJ!;l,'i.1\ -:; !()I)
Fidelity Makes
OTCEasy!
Is the ore market under.-alued? Consider Fidelity ore Ponfolio-
up 26.3% lover the pasl ye:lr, The fund is poised to lak ach"'JJ1tage of
todJ'(s aaracti\'e OTC prices. Of course. pasl perfonnance is no guarantee
of future resuJl5. but many iIT\'esto~ see the ore market lS :lI1 Jggressive
opporrunitv for growth.• San \\;t!1 IUSl 52. ,00 ($,00 forlR.-\.s) • Low 3°~
sales charge.• 2+hour toU·~ 5ef\1Ce. E.:ls\'lelephone exchange to more
th:lI1 50 other Fideli[Y funds
I
I Call toU-free 24 hours. F2"'I:'LJ'TVI 1 800 _.' / -6'-- L c.. .~ I J
I -. -'+i _.\JQQ INVESTI11E~
L_~~~~~~~~~~ ~~~~~~~_
t
I"
I "
, .
I •
~
I' I
i "t'
,. ,
F I
! ..•
.,
1 i
I 'j
I ,
Equity Fu~ds - ¥ear-3v-¥ear
Because our .~ WWlt ~eot l)4IrlOf'TNlnl:e wi1nout ~y ...a 1'1IIK• l.oOQi( ~ ltMt n~.: ! "''!A'' EHQEO ......... ,...,. .... 'c-.~.... 12'31 76 +31.2% 12/31181 + &.2 12'31;n + 7.0 12'31'82 +~.6 12:31,78 + 1•.3 12'3183 + 1i.2 12'31'79 +.2.9 12 31 84 • a.o 12 31 80 + 3:3.7 12 31 85 +2i.9 PARTNERS FUND ... ~ --.' -. -. ~ -.'-~~..I"'..:.. _._ •. ::. '! WE DOUBT WE'LL i EVER BE #1. ! i . 1 • NO ~OAO • CONSISTa<Y ~~ mwtle' .,... • ~QAT1Ol'o Q1 601% :::.:.. ""'.~_~u., ,.".. oauoon Ot e.-d tOIl''''''''' 1·~·922·J700 . ------- .. I Neuberger -....,. ,- ...."....., • ~ O'O.oec\o& 0&"'0 "IX"'"". I &Be an _,'eo>'O...... OO''''.-. J ' I >-u ::;~~: ~; ~~~;;:·"",:1 I _ .... 022" 1·IOO·gn·J700 of I: - ~~, I -. !] :'" 51 ... ~ ~---~-----------~
Toc:aIlenim' I
10.:60/. ,
19 O'l% I
Z~g~.41
10bl·"
!8':'j'" I
'teu
1981
198,
1Q83
1984
lQ@~ "lou! ~rn ';2U~ ior e-xh nf 1M las! fil'~~. l'lldln' 12 \ I
Includt chanl~ In ;hart pnn and rtl",'~1 oi ~ dl\1<l~nd.' ~nd
CJ!lIW UUl> dl>lnbuuon~ upd2unll1lt P~IU$ T,>l:ol1 ",{urn lur
III~ "!"1"" ~clt<14·""N.l"a., I'll" SIOO mar~ concllllon' ..~r~
~tn~nlI\ '10 nu, ~uC1Ualrd .. odth ",,, lilt ~nod> <t\< ... n
Consider transferring your IRA to Fidelity Puritan Fund. The conser,
\,:wve strategy of this stock and bond fund has Pl"O\idea regular dividend
income plus me pOlenU:ll for me kind of growm shown in the chan.· In fact
it was up 261S% for me year ending 9/30186 Of
course past perfonnance is no guarantee of furure
results. You'U pay no sales etI:ln!e md ~el conven,
tent telephone exchange. Irs e:!.'>" to tranSfer vour
IR~ to Fidelity Sun with lUSt $;00. (SlOOO for~·
lJr invesrments. ) ,
Fidelin' Puritan Fund IRA. ~l)r mort comoj~l~ lO;ormallon ,nCludlO~ ""
man:il/t'm~~1 i~ and t'~llt'n"t"> cJ.lI or wme for a ~ pro,pec!U~ Ilt":ld If cart'rulh I'lt-tnre
'"'1 In\eo! nr -end mone\ FideJln- DISlnbulO~ Corpurollin. v.,ne~ OL'>lnOUlIlin ~~t'nl.
PU ~I\ oo~)j" l>aJ16S. TX -:;ltxl
I ~800-'544~6666 R~IMtt ~ =~ents
L In '1a.'>icnu.....lISc~1 Cl~~ I>",! ~·1\l14 WSJEJPURl/103186
----------------------~----
The T. Rowe Price International Stock Fund
By investing primarily in the stocks of leading companies in Europe
and the Pacific Basin. this Fund gained 73%9 for the 12-month penod
ending September.30. 1986. The mirumum invesrment is SlCXXJ (S5OJ
for IRAs) and there are no sc.I~~. For miormation. call toil ~
weekdays 8:.30 am to 8:00 pm EDT: 1-800-638-5660. .~_
~ 'IRoweFTi<:e ".. ....- - . lnr.:est VYith Confidence . .
T. RD_ Pria. 100 E. Pratt 51 .. BaJtl1TlOn!. MD :::1202
Send a prospec!Us with more complet~ mior-
rn.100n. !I1dudmg rn.1Ngl!m~nt te-t's and otne~
charges and expe~s. I will read It careiulJv
beiore I tn~1 or send money.
It.~ ..;.. • .... :.r: ~. ,. • • .,
·oo,...-.,r-.ar",...G·,jlres· rl.. "..,-,-~'~-:;;"r-:,.:.. -J ••AA 7",..P=· -=AlrOI"'l~=. .~_ ...... - ,; ;l.~:- . ~ .. ' .. oJ ... ~ __ • J',J __ ._ .. " ...,.'J'.,I "_ _~._ ~ __ J" -..r- .... __ ._
::-·or." ;,g,3Cf1Ce:::Hion ~o 9f3C,06 ~~,e :'_:'c ia'l'!'J 2;' 6", :'sves ~c: ..=e ':-a"s!'S ,f1 ::',":::"
'a'u!. ~""esteo C""Oel'CS ana ~::lI~1 gains C1Strlout~S- ~ ::lage ~ ~r me 5~(er"'e"l :r ':'oc:,:cra
'ntor'"1allOf1 Mark!! C:Of1CI{,ons ·':.;::..arec af10 ::ast :>ertormance '5 r,Ot ,n(Jlcaf,ve or :uf:.;fe 'es.. ,';
T Rowe ;l"ce ,n"es[""e~r :.e('\(lces. '''C :)'S,Tlou[or
Corporate Cash Fund
GEIC04S TAX BREAK FOR CORPORATIONS 96-Day Yield 6.81 %- Delivers 11.74% Effective Tax Equivalent Annualized Yield: ·c..uCtUlJIJtf1 an lltt I-':;nd,; "WI "'lyj/m~! I mcomt' lJrH1 QJJfIr¥ 3'1Cf ~ ,it,,;r, ',)f :"to' I )I&.\kl;, ;JttI'flU1/1l .,,~ ~ ,,, "" ~ '1I'1tJ..J _ .: .... I ~(ff't(~u:,;llllJlo:r:J(Jl. -l..a.-,"fl."_. ;"·"1COl"fJ(}f'Crl :c.z ..rnrJ Ji/I1U/"OUll",,:'; ....:.. .... iI'...· Mr 'IIf,' '\;'''' dtt'lattrrW·~t\·,·,,'iO NUL:.. :", i For mort l''Jmvi~N mformal/On, melllli,..,·' "'larllJf}emtmf fte.s tJ'fld exPt'l.>c.). lall lor Q /rl!t! prow, .'!<!(JSI! rtad " clJr~flJiiu ",,'or~ YUU '"''''Sf f)r S4'T'1a _,/'Ii, The measure or" a successful corporate cash management program IS not what you earn. but what you keep - alter ta.:res. V./ith GEICO Adjustable Rate Preferred Fund. you keep mort::. because the Fund's dividends ~ualify for the 85% divldends- receIved deduction. The Fund offers corporate treasurers a prudent. efricient means to earn attractive rates and keep 93.1"'n or" earnings - after taxes. Acorporation whICh otheTV\'ise would pay the maximum 46 J/'j rate \'.:111 pay only b,9% tax on the Fund's dividends. DIvidends on the underlying securities are adjusted quarterl\' aligning YIelds WIth current markets to minImize share pnce tluctuations. Portfolio diversification results in still further stability. Fund earns dividends daily. :v1onthiy distnbutions to your account may be paid directly in cash or reinvested in additional sharc:s Sh~res may be redt:E:mt::d C~lr then current net asset value by telephone for next business day federal funds wIre. Or by check. :--10 sales charge for purchases. reinvestments or redemptions. 800-832c·6232 lin ~1i1r'\'land, -:all collect Ju 1·':l86-22001 - -- - --- -- --- -- - -- - ~GEICO ,-\DJeSTA.BLE R.:\TE - -~- PREFERRED FUND CEICO Investment St!rvic~ Company CEICC> PliUa. Washington. DC 20u76
Tax-Free Income Funds
The T. Rowe Price Tax-F~ High Yield Fund This Fund's current i.35% tax-~ Yield is eawvalent to a taxable Yield of 14.iO% for Investors In the 50% bracket. 10.97% for those in the 33% bracket. and 10.21% for those In the 28% bracket. The Fund invests in long-term. meclium-to-lower quality municipal bonds. Active management helps mamtain high Income and reduce volatility. but yield and share pnce will fluctuate. In the U months ending 10/16/86, the high pnce was 51178, and the low was 510.16. Tne minimum investment is 510c0 with no s.ues ~. For information. call w~kdays 8:30am to 8:00pm, Sundays lOam to <pm EDT 1-800-638-5660. T.~ftice. Invest YVith Confideru::; ~ \-1at.l to: T. Ro_ ?nee. 100 E. Pratt S~(, B.tJl1more..'YtD :1:0: Please s.end me J proSO~GUS .... ,tn mul'e compiel!! trUortTUtlon, Inclucilnll: man· agement te.!S and Other charl!~s In<J e-xpenses, I wul read It careruil\ b.!tore I uwest or s.end money •Average annl..oollze,: ,'-:': ':t :-e se\te r :a':t's el""::tria ~Gi ~6100 . .:asa~ on 3(1 average :r;ce :er s",,:a'~ of SUo 74 Av!rag!! ~at,-rtty cunng (:-lIS ceflOO Has 24 ayears Income may oe suo,ec: to stare 3r: iccal taxes ~:;::we :. ce Inves:ment Services, inc. O,stnOu[cr
The T. Rowe Price Tax-Free Funds
_ 3us~s
Sure
_Home
Cry
t )
------------ M.ulto: T. Ro_ Price. 100 E. rnn St.
a.1!UnO~. MD 21202
Pleue ~nd me • ~ miormaoon lut and
pro5p«ruse5 with mo~ comolete WOl'TT'wl'
llan. Including tn.lIN~1'1t i~ .nd Other
c~ .nd ex~. 1will ru<i ~m
~ru.Uy beio~ [ 111~ or ~nd money.
Also 5end me. fre.e lIUormanon lut ior:
::IRA=~
F\JNO
Now, taxpavers 1I1 a wide range of brackets can benefit from investments paying dividends
that are 100% exempt from Federal taxes: As the chart shows, even investors in the 28%
bracket can enjoy attractive equivalent taxable yields from our family of municipal bond
funds. All four of our tax-free funds have a SLCOO minimwn investment. Plus, each oriers
free checkwrrting and no sales charges.
The Ta.x.Exempt Money Fund invests in short-term municipal securities. It offers maximwn
prindpal stability. plus tax-tree money market yields. Although yield and price can vary. this
Fund has always maintained a constant 51.00 per share price.
The Ta.x·free Short-Intermediate Fund offers higher yields than the average tax-tree money
market fund. with price stability greater than funds investing in longer term municpal secu-
ritles. Yield and price will vary. For the 12-month period ending 10/22186. the high pnce was
55..26, and the low was $5.08.
The Tax-F~ Income Fund is for investors who can accept the wider price fluctuations of
longer term municipal bonds in pursuit of an even rugher level of tax~empt income. Yield
and price will vary. For the 12-month period ending 10/22'86, the high price was 510.02. and
the low was 58.65.
The Tax-F~ High Yield Fund seeks the highest yields over the long term by investing in
medium-to-Iower quality S<:'Curiries. Income and price volatility should be the greatest of all
our tax-tree funds. For the 12-month period ending 10/22186, the high price was 511.78,
and the low was 510.15.
Call weekdays 8:30 am to 8:00 pm, Sundays 10 am to 4 pm EST: 1-800-638-5660.
r:t1:Rowe:Fn<:e ;....~
Invest YVith Confidence'~-'
'Inc:;me ~.ay oe SuOI~::O Slare ana ,ocal :a.es . .l..~'~~" 31""...c"Ze'J '{'e!o forme 7-cay ~ ~Cln~ iQ,ZZ/86. Aliera'Se ~a["(ItY ""as :C, :a.~
2:Wera'!! annuallzec 'l'e'C for me 7cays e"'~I~; ;:::.. 22'~-: oasec en an average once oer snare 01 S5.25 ~verage T.allJ"tY ounn'S ~~TS ce"oc
..as 3.8 years 3 Avera~ ann",allZ!'O l'e'c ~or :"'Te 7 :,a',s ~~::1"5 ,002.'86. :lased on an avera'S'l! once oer snare 0; S9.85. Avera,!! ~a(~""1
cunng ~nls ;lenoo was 24 'jea's 4 Avera'!e ar~ .aT~!'O .'''!IO :cr :ne 7oay<; enClng lOI22'S6. ~on an average once oer snare oj 51:. 7 :
Mfage ma(un~j ~",nng :n,s oerooo ..as 24 a years 7 i<~ ?nce In~menl Se1'ioces, In<:.. D'stTlOUIOf
~ XEROX F;mlnnul Sen·WI'.' C"mf'l./n\·
Van Kampen Merritt
·Current vleld I~ determined bl' innuallZln~ the month'" dl51r1bullons paid
per ,hare lor the I month endJnlZ OctOber 15. 1986 ind dlvldlnlZ the re~ul' ",
the ..'eragc rt\itA.mum puor,c offertng pnce tor the ~me peruXJ A portIon
"f:he tn<.:vme rt\ity be ,uOlect 10 ""'e ind locaIIUC:,. Effective: 11. 8i.lhe
rt\it"mum la>. bracket t> e... pected 10 be 385%. WOlch would mean
you "'''ulll have!o C::Im 12.80 o/c on .. raAaOle Invesln>ent !O e"lual !hl' (.;I ....
e,empl, ..:ld.
TAXABU TAXFRH
Tax Free High Income Fund
h91°/~ 10.99om
'
If,,ou're In Ihe 28% brockel, whIch IS I!.%~cud 10M lite m4nmum
brad:elejfecm'e 1/1/88. .vuu wouLd have 10 earn 10. 99 o/c on a
uuable InveSlment {() eqUJJJ IhlS lax-exempt .\'Ie/d.
The van Kampen Merritt Tax F~ High Income Fund
earns monthly income exempt from federa.l income taxes.
You aJways have easy access lD ~r money. Open ~r
account for as little as Sl_~
Both the current retum and the net asset value will fluctuate
as mark.et conditions change. 51..+ 15 and 516.50 were the net
asset values on IOiIS/85 and 10/15/86.
CalJToU F~ and we'll rush a prospectUs whIch Includes
more complete IOlOrmanon about charges and expenses.
Read it carefully belOre you IOvest or send money. (~rgia
residents call 1-800-6.33-2252).
, .' ~~cC ~ .~' ~c... • ~~~ •Anractive ~ ,,,,:':' """","" yields free of , ~ ~~ ~. ~ Federal income tax. ~ • Stronger price stability than long-term (4' bonds, even though net ~ ~~ ~sset value f1u~tuate~. Tax·free G ~ Income anracuve to Investors In most tax brackets • Free checks for 5500 or more • Ready liquidity. No sales charge. Stan with just 52,500. D- re~ rh '1 C' Intennediate Tax - • • • • - • • • ~- ~ ~ ~ Exempt Bond Fund. Inc. '" •. P.O. Box 3498. C.amden. ~J 08101 :- ~~. . ; I 'I 'it' r J I :Ollr :T\ur~ ... \lmr"letc: tnlnr:nallun In... IU-Jln" :TWl\;UlC'mcnf lee .. nara~ J'il' .~.... I ,n.J .'r.~'c' ,r" ..n. r,,,,C'CctuS 1'" 'Cn.Jln. 'n" ....upon il.eau" [",/, I .Helu,h nC''''e ".uu ,n'e" »r ",na :none' ~ .~ .._-.~_ I, "',me _ I ."u..lre\> FOR A PROSPECTLS I ; C,,·. C.lJlloll fru. c1.lv or "'gilt. , :"... ZIP ~ c1.lvS 3 weel.. I • ,.., ''''411 I·800-USA·LI0N III ~ _ _._-·C"'f~.m .I'l,. :!": . .,.~ .....c f"'Io.a -:'c: 22 .~ oet -~ O'r "'''IC)t"f.",q • -o,a-. ,I'IC~. 0- tnat. 0., )2 .I"C ' •..c'''Q 0., '''' n~ -." eM' ,"., ....,. tto,I. on '0, 22 M ••• Jl] i:3 I~O" 10, 22,.~ ••• 0$12,..
I"""-."",,,,.,,,,, ~'""" .. -" c::\' Ma1J to T. Ro_ ~ 100 E.lSt mtt s~. Bainmore. \oID :1~: Send • ~With more comoil!te tniorTN· tlOn, l1'ICludinV; maN~~nt ~ .nd Other chMlI~ .nd ~p.!nSc!5 I will r1!ad II Cat'l!NUV before I I!W~1 or send monev , .. The T. Rowe Price Tax-Free High Yield Fund Tnls Fund's current 734% tax-fr~ yIeld is equivalent to a taxabie yield of 14.680,,0 In the ~o bracket. and 10.1~0 in the 28% bracket. The Fund invests In iong-term. medium-to-Iower quaiitv muruci.f,al bonds. Yield and share pnce will vary. [n the 12 months ending 101_4/86. the high pnce was S 11.81. and the low was 510 15 No s.c.I~s c!urges. C.:l1 w~kdavs 8:30am to 8:00pm EST: rl.1-800-638-5660. L~Ftx:e. ~~;r'i Inr:est Y\oTth Ctmndm.ce " I I I I I ~ral!l i I ~t/;"!i I ~. '.. 'I" ~,,~';g~ ="'-:"t:"t:!~ .i;~.= ':r :~~ scver: :a'ys e":I:"''5 ~~.2~;66. :.a:ll:--=)r ar ~''Oera!::r ce ::e" 5.~a'-= :;f 5L 77 Ave'age '"'Iat"fI!, :uflng t~IS ;,eflcc ...as 2:. a tears, Incor"'e -r.a, :e suo,e~: ~c s;~~e 3!":: 'cca~ :axes - :;"we OJ',ce ,nveSi""ent Services.. nc ' O'StTIou(or,
II Thanks to tax reionn. The new law makes Scudder"s mUnicIpal bond funds more accrac Ive than ever. • And no load makes effective yields even higher. 'lou pay no loads. no fees, no redemptlon or 20-1 charges which reduce your investment return. 'rou get added benefics mcludmg low 51000 minI- mum and free exchange among 15 funds. II call or write today. \\e'!! se~c \'ou more complete mjormatlon on ~he ::lcudde:- Tax Free Tar.se~ Fund. SCUDDER TAX FREE TARGET FUND 75 Fede~ S(re~t. DepL ;52 BOSlon, Yl ..s. 02~ 0 D High ax-tree yietds with reduced riSK. Scudder Tax Free Target Fund lets you tailor a rrux of capital protec Ion and tax-free income thac's n~nt ior you. The Fund's four portiolJos offer long- term inveStors a degree of capital protecuon not avauable from funds W1chouc speClnc matuntles. (The Fund's yIeld and share pnce will fluc- tuate. 10/24/85 and 10/24/86 share pnces were oj 0.58 and S 1.00.) &I TodayJ s attractive tax ·tree environment. Scudder can help you take advantage oi attracuve opporturuues aval1able nghc now m he muruclpal bond market. ConUCI XUaOf'f FUM U,.tnOulors. Inc. lOr a llrOS~tu. conUlnln~ morf' comp'ete In10mt3!10n InCluo,n\? mana~emenl Ie,:,; and ~xoense •. Reaa II .:areiuil" ~iore '"ou '",'es, or ~no mone'. '5,9'~, IS the !!:"'J Port/ollo S net annuallze'J ""eld ,or 'ne i days ending lOI24/~, income rna\' be ;UOle':l to SUle ana :o<:a, uxes .nd J smali ;>0 I": Ion posslbl\' to federal t.xes,
The T. Rowe Price Tax-Free Income Fund
This Fund's current tax-tree Yleid ot 6.80% IS equivalent to a taxable
YIeld of 13.60% In the 50% bracket. and 9.44% In the 28% bracket. Yield
and pnce will Vary In the 11 months ending 10: 17;86, the hlgh price
was 510.02, and the low .....as 58.64. The minimum Investment 15 51.000.
No s.ales ch,uges. Call weekdays 8:30 am to 8 pm EDT: 1-800-63~5060.
l:::- (:t\
i
I • ..:1
, - _ ..
·I·..:.... e.. =.~ ~:-·... dllle'; "1;0"': ':r .... ! seve~ :ayS ~,.,c;r5 ....,. ==. :as-:': :r d(" a .er3~e:r c: :e' ~,-:3(~ ("
5986- :"ve'3q! rna(~;'~'i :~(.,..~ :"'hS :e"ocwas 2~ 2 :,'!ars l~c:m! ~ay:e SuOr!C::O s:a!! ar.~ :OC3 1 •
I :ales ';" 'looNe "'Ice .~ ,es;-~~: Serv·ces. ·"C. )'Slrrol..:C' :
Wmguard Jyfunicipal.&nd FUnd" High-Yield Portfolio
IT'S TOUGH TO GET 15.5~~ •••
UNLESS YOU'RE EARNING
7.77% TAX-FREE.*
You know 15% yields on qualicy caxable bond invesc-
ments are simply noc available coday. So Vanguard's high
tax-iree Yleids could mean more money in your pocket.
de?ending on vour tax bracket. To lind ouc how a cax-free
investment can offer vou more monev chan a taxable
one. send ior Vanguarrfs Tax-Free Income Fund Kit.
The Kic will heip vou compare tax-free and taxable
V1elds so vou can decide which IS better ior vou. It WIll
explain hO..... you can take advantage of the tugh tax-free
Y"'elds currently available irom mUOlClpal bonds wIch
Vanguard Municipal Bond Fund's SLX Portfolios. Plus.
muruclpaJ bonds offer you the relacIve saiecy chac comes
wlch the backing of local governments.
Like all bond funds. the Yleld and share pnce wtll
move up and down as Interest races fluctuace. ror exam·
pie. the High-Yield Portfolio's share pnce on 9130/85 was
$9.38. and on 9/30/86 was $10.40.
Vanguard .\tuOlcipal Bond rJnd offers you:
• L"nlimlced iree checkwntIng ior 5250 or more.
• Toil-free phone exchange ac the then-current nec asset
value wlch some 40 Vanguard Portiollos.
• Low 53.000 IOlClallOvescment. commission-free.
',7";"\0, wi> ,h~ h·..r>~~ annuahzed v,~ld for ,h~ H,~h-Y,~ld f'onfoh'lior th~
JO-!U\ P<'tlrlQ ~~a~ 9tJO,ilii th~ av~rJq~ rTU!untv w15 21. 4 v~ar"S. For
\Otne-oneo In rn~ ~ ora-.:kct. tnco {a.UOI~ e<JUIV11~nt v~td IS l5,.;...,. In th~
28'" brae ...!.,!. an aHraetlV~ 10.79'0- Ineom~ ,s 100-.. ire~ irom ~~ral
Inco~ tax Out may oe !\IOpt'tt to st~(t and loc~' (;ale~.
uJi J-800-062-SHIP
24 Hours, 7 Days
ASX fo- QUI flU Tax-Free Income Fund Kit. Or send the
coupon coday.
IN I'HILADE.lJ'ttIA VIsic our Investment Center ac 1528
Walnuc Screet.
r~~~~ci~~d~d------;
I Investor lniormauon Dept. 95
I VaHey Forge. Pennsylvania 19482
Pleas.e ",nd _ your :T~ Tax-F.e<! Incom~ Funa KIt. Inelua,"~ a oro·
I s~rus wnleh I may ",ad belore I,nves! or ~no money I una~~! ana
{nat It conUlns comD«!'te tniormatlon on id'Vl50rv :'~S OIS( nOutlOn
I ,ha~~s 0II<l Olner ex~n~•. Also ~nd ,niormallon on
I ::: IRA 1711 ::: KeognJPens,on ..0).
I :'i.me _
I .J,ad... » _
ICilY --- _
I 5u(~ L~_- _
I 28-wE ·Co· 2;~ I
THEVan~I~~glJJ~
%* ... ame .~, _ Ul\ Swe ZipI _ Fidelitv A~ive Tax-Free Portfolio. Formo~comp~inior· lTl31lOn.lOcludtnll manJl.(emeOl fees. e'lpenSt::>. 1"'0 redempoon fee and afree os.sene ape. ple2se cIJ or 'ltT11e for a tree pmspectlJ:i Re:ld Jl Clt'efuJ.h before vou IOvel or send mone't. fidelity DlslnbulOrs U>rpol'2DOO (Gener:1l Dl5l11buuon ."'J!eOlI. P0 I:l<)~ bQ0005. D:1lliI.:l. TX -;266. ~ro I'-r~ .. _.~ ----- ..(~~.~.,. ::sw ...•.~ .... FID£LllY INVESTMENTS Call lOU-free 24 hours 1-800-544-6666In .'tim. c.ail coUeo 0(-·)l3-1919 Fidelity's Aggressive Tax-Free Portfolio seeks the high- est tax-free yields by investing in high-yielding, often volatile securi- ties. As with any murtidpal bond fund, yield and share price will fiuetuate-Aggressive's share price was $9.90 on 9/26185 and SI1.31 on 9/26/86.· ~o sales charge when you invest· Start\Vith just 52,500.· 24 hour toll-free customer service.· Exchange privi- leges \\ith other Fidelity funds. Aggressive is one of many Fidelity tax-free funds. To hear the latest in tax -free investing, ask about our free tax-free cassette. ".-\nnuallZed \"M!ld for the • cUvs ended 10, I O,~. ~ on an a\'enee shalt Fre rc e elpnce of SI J.~. ~nll p2\lnffil b\' Ihc POrUoho'~ mv~enl 2dVl5Or for a~ expense; In t:lCtSS of il'j" (cumnll\ 19"0) .~ ponlon of Income llt2\. be sub- ..- iiii=:~~ )eO 10 SWt 2lId local LaX andior the Jhemau\"c mInimum l2X.
Z., Clf~'
I
,\1au :u T. Ro_ Pnee. IQ) E. real! ::>(
BaltImore. :-.10 21::'J2
rlease S<!nd me d tree ,"rurmallon 1..11 anJ
pros~uses w,th mur~ cumoit>!~ Into,m..l·
lIOn. ,ncludtnll m.1na~ement r~l!S and elln",
charges .lnd eXOOc'nSl!S I"iii rl:Jd th~m
carerullv ~rore !Invesl ur s~nd :Tlunl!\'
Also send me J ~ ,nrUrm<llhJn iw tu,'
• -: IRA - Kct'!'\"
5.75%1
I
8.46%1 '1.34%
EOU'.....lfNT
;.u.A8lf YIELD
".u 8IUC<E"S
JJ'lI,
.;.:....-
3.85~kl 5.35%!
I5.67010 2 7.88%!
I i
6.73"" 9. 35o/T 0.04'I,: 13.46%
7.34%4 10.19%1'0.96%114.68%
; I
The T. Rowe Price Tax·Free Funds
:\ow, taxpayers in a wide range ot brackets can beneht from Il1vestmems paying dividends that
are 100% exempt from Federal taxes." As the chan shows, even investors in the 28% bracket
can enjoy attractive equIvalent taxable Yields from our family of munlClpal bond funds. All
four or our tax-free funds have a Sl,CXX) minimum investment. Plus, each offers free ched<-
Y.'ntlng and no sales charges.
The Tax-Exempt Money Fund invests in short-term murucipal securities. It offers maximum
prindpal stability, plus tax-free money market yields, Although yield and price can vary, trus
Fund has alwavs maintained a constant 51.00 per share price.
The Tax-Free Short-Intermediate Fund offers higher yields than the average tax-free money
market fund. with price stability greater than funds investing in longer term muniCJpal secu-
rines. Yield and pnce will vary. For the l.2-month penod ending 10/15/86, the high pnce was
55.26, and the low was 55.06.
The Tax-Free Income Fund is for investors who can accept the wider price fluctuations of
longer term municipal bonds in pursuit of an even hJgher level of tax~xempt income. Yield
anc price will vary. For the 12-month period ending 10/15/86, the high price was 510.02. and
the low was 5861.
The Tax-Free High YieJd Fund s~ks the hJghest yields over the long term bv investing in
medium-to-Iower quality secunnes. Income and pnce volatility should be the greatest ot all
our tax·free funds. For the U-month penod ending 10/ 15i86, the hJgh price was 511.i8.
and the low was S10.08.
Call weekdays 8:30 am to 8:00 pm. Sundays 10 am to 4 pm EDT 1-8~38-5660.
T.RoweFTice~lm.'est Vvith C.mfidt:1!C~ ta
T..v..EXEM""
MONEY
I
, FUND
TAX-Ale:
5lo+QIlT.
i INTERMEOlAIl:
I T=e I INCOME
I
FUND
TAX·AlE:
MIGH vTELD
I FUND
~""';'l'"''
-.:-~ - at:: ~""'~Ie-::' ": )~a:~ ':;"'0 Co:4I ~a .... eS • - .. E" ~ ..- .,n'" ... d·l'::~ 11~'''J ':' 'I"\~ ;.:ii., :!'ICC !"Cl:"~ ~..=,;,o ~. ~"3~~ ,-al ... ' .., 4'oidS .• _ :.:::.;
2 ~"-='~~"? ~I":r: ..,0' lee 'III?'': ':r :"e i cayS ~!"'ICII"\~ .: .: :-: ~oSC~ .jr. an -3'/~ra~! :>rtC!~' 3:-:ar'! ~r 3S 25 ~e"a~~ ~aL": a~rt"'&· ... "l :-' ::
....0:. ; ;. !cars ~ ~ ... er3.s-:: 3r."'·.dIlZ-:'= II~!C ~:~ .,,-: - ':.c: ,-~ ~""":i"'~ to,'''~5Jac :as~:>n ar d ,erage ;:rlce ~, j;,are 'Ji 5-; 5-: a.",era~.t? '.'"i,~ ~ •.•
:::.."r"5 '-.; :e' r..c Nas~'; ; lears .; ,l.·,era~e an"·,a".:~ .·":C :;;r :ne ~ (JayS enolng :c.~·86. oa5e':l on an average :lr,ce :;f:~ s~a(f:;' ~:. ':;
;'.er~!f: ~a[ .... r::1 :l;nr; '~IIS :er'QC ",as 2,: -; years ,. :;owe P'lce 'n"..srmefl{ SeN,ces. ,nc .. ;)'SlTlOuIOt
•
58 THE WALL STREET JOlTRNAL TH'LTRSDA Y, OCTOBER 16. 1986 ;d. EO\..:-..... LE."" r AA,-\SU ~ I EL:) ::OR 'rlESE SRAc:1cr7S 7.8800'.! 8.46~·. 11.34.... I I9..28'o/0 ! 9.'1'r'. I 13.,36.... i' 10.24.... lll.~0 14.7400'. I 3.88%: i 5.39"". 5. ifJO'. I Now, taxpayers in a wide range of tax brackets can benefit from investments paying dividends that are 100°'0 exempt from Federal taxes-, As the chan shows. even investors in the 28% bracket can enJoy attractive eqUJ\"a- lent taxable y1elds from OUI family of municipal bond funds. The Tax-Exempt Mo~ Fund invests in short-tenn municipal securities. It offers maximum principal stability. plus competitive tax-free money market yields. Although yield and price can vary. this Fund has always maintained a constant 51.00 per share price. The Tax-Frei! Short-Intermediate Fund offers higher yields than the average tax-free money market fund. with price stability greater than funds investing in longer tenn muniapal securities. Yield and pnce will vary. For the U-month period ending 10/13/86, the high price was 5.5.25, and the low price was 55.06. The Tax-Free Income Fund is for investors who can accept the wider price fluctuations of lon~r te:T.1 municipal bonds in pursuit of an even higher level of tax-exempt income, Yield and pnce will vary For the 12-month period ending 10/13/86. the high price was 510.02. and the low was 58.60. The Tax-Flft High Yield Fund ~k.s the highest yields over the long tenn by uwesrirlg in medium-to- lower quality securities. Its income and price volatility should be the greatest of all oUI tax-free funds. For the U-month period ending 10/13/86, the high pnee was Sl1.i8, and the low was 510.03. Free check-writing, S1,(O) minimum and noscles charges. Call ~kdays 8:30 am to 8:00 pm EDT: 1~38-5660. T.Rowelli~~Invest VYith Confidence ----------------- ~ to: T. RD- PnC'f. I£Xl E.ut Pmt s~. ~tlmOn!. MD 2l202 PIi!~ 50md ~ • ~ llliorm.Ioon \tit and ~wM ~ com~ ll'Vormaoon. ltClu<ting l'NN~ Mos Vld otM ~ Vld e:rpmses. I will rud tlvm c.uefu.liy ~ IltM!5t ex ~ morwy. ""O""'! -ay:::l! Sl.;CleC:: s:a!! ana JCC.a! :;pes. : ~al""';,.alllec·(Il!!O·t::f ~ 7-cay Cl!!'1OO enQ!"i D'!.3186 ~@e -an.:ntywas ;OScays. 2. ~? 31"~ ,-d' ::-': :/'!!C~cr~~ 7:.avS~C:"i D"':;''8C::.aseo on an ~:IN:!::e- s,-all!o;i $: 25 ~....ar..;~/C\.r:l"i:"ls ~"'CIS ~G tea"i; ~3r-"'.;allZec ."!'C ':' '-~ 7:ays !'"::~i YYd:. :asec::r ar ~~:ll"<:!:e' s,-all! ':;/ SS 2.5 :.-.a@e -att;rrt;l CUMi 'n1S oero:: ''''CIS 2:':; .e.a"i ~ ~aN"UUre: ,'I!lC .,::-'! - :.;,< ~C."5 :c...3IS6. ::.asecon ar ~once::e-s,-al'!':JI 5:: '2. ~-allJm'!Ot.:r.ng:nesoen::o'..-as25 :,oS!"; '; i'0N!;)~ '''''~:~J1Ce5. "'c .. :'S:;-:_'::
A XEROX Finunnul S{'r'I'l(,f~ Com()UnI'
Van Kampen Merritt
Ifvou ie In (he 28% bracker. wrllch IS ezpecred (0 be (he ma.rlmum
bracket iffecm'e 1///88. .You wouid have (0 eam 11.03% on Q UU,
able Investment IV equal/his (a.;::-e.ump( vIe/d.
'Current ~Ield IS determIned ~ annlUitzrng ttl<: monthi\- d,strtbtJtlon, pallJ
per share ior rhe 1month endrnll SeOlemocr 15. 1986 anc dlVlalni tne result
by (he avenge mU,Imum public oiferrng price ior the ~me perrOd .->. por·
tlon oi the Income mav DC subJect 10 Stale and local lues. Effective 1'\ 8i.
!he maxImum ta.' bradel IS expected 10 be 38.5~. whIch would mean
~ou would have to earn 12. 91~ on a ~unle ,nveSllncntlo equ..11 (hrs ~x·
exempt yIeld.
TAXABLE TAX fREE
Tax Free High Income Fund
~94°/~·11.03%
The Van Kampen Merritt Tax F~ High Income Fund
earns monthly income exempt from federal income taxes.
You always have easy access to your moDe:' Open your
account for as little as Sl..500.
Both the current rerurn and the net asset value will fluctUate
as market conditions change. 51418 and 516.37 were the net
asset values on 9iI3/85 and 9/15i86.
CalIToU Free and we'lI rush a prospecrus which Includes
Inionnatlon about charges and expenses. Read It carefuJi;-
betOre you Invest or send mone). (~rgi.a residents call
1~3-2252).
. .. . ~-
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... >~
:~ " ..........-.._ .
.~ ..~::
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.=,,,,,,,~,.'-"
L,~~~
1*
charge and you can mO\'e
your lnvestmenrs wlth J
quick and t'asy toU-fre::> (aU,
• Call now for free facts.
Today's tax-conscIOus Im'es[ur
can benefit from current UOP( lr-
tunities in the mUnlclpai bone
market. Call now - toU-fr/::'::, -
for a free fact kJt about how to
invest in Scudder \ lana~ed
Municipal Bonds. IOU can start
with just ~1000..~nd add to
your Investment In any amount.
Two more good reasons why
so many Investors call for
Scudder .\Ianaged .'vlunicipaJ
Bonds.
..:..... -~: .. ~~
6. No-loads, no-fees,
no-surprises •.At
Scudder you won't pay
extra fees for tax-free
yields. The Scudder Farruly
of Funds is completely no-
load. There's never a sale::;
charge, 12b-1 charge, or unex-
pected "back-end" fee tater.
Nothing but tax-fre~etums
right from the start.
9.9%
Taxable
equivalent to
SMMB's 7.1tto
11.5%
13.7%
28%
/---+-----~;" ..
38%
most experienced investment
companies. \\'e introduced
America's first no-load mutual
fund in 1928. We were one of
the first with an international
stock fund ..~nd we're a leader
in investing for tax-free yields.
For over 66 years we've put
ser.,rice and performance first.
5. Scudder's investment
flexibility, convenience
and value. Scudder :v1anaged
Municipal Bonds is part of the
Scudder Family of Funds,
Invest and you're free to move
among 1S no-load mutual funds
that offer growth, income and
stability, as weil as tax-free re-
turns. l()U ne\'er pay a transfer
48%
SCUDDER MANAGED MUNICIPAL BONDS
17:; Federal Strt"et, Dept. 190
BO::iton, \IA 11211tJ
3. High quality. As of
10/9/86 the Fund's entire port-
folio falls within the top three
quality ratings - 72'J7o are .-\.A
or better.~
1. High current yield.
Scudder :'lanaged :Vlunicipal
Bonds is currently paying
7.1% tax-free: If you're in
one of today's top tax brack-
ets you would need Qt'er l;jl'!cl
from a taxable investment to
equal Scudder's tax-tree y'ield.
(The Fund's yield and share
price will tluctuate. For ex-
ample, on 10/9/85 and
10/9/86 share prices were
58.11 and :39.03.)
2. Today's' attractive
tax-free environment.
Current returns from high-
quality municipal bonds are
\'ery attractive when com-
pared to the returns from
comparable taxable securi-
ties. Scudder can help you
take advantage of this oppor-
tunity right now,
4. Scudder's professional
management expertise.
Scudder is among ,~menca's
,flL·\! '" i.I4Ilh-'" rlllli~ "'.. lr:lJul .. r ... II" 1"'.1 1"""'1'''-' f~I"', -1111.11111111.: '!ll'/'" 111111'1("11' 1I1fIlflll.I(l,1I1Ilk lut.JlIIL.: IIL;Ul;h.::,'!tll'lll ItT .... ,llul '·'Ik· ..... ·... k, .111.1· .• 11 :~:~I
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""r.. ",."... 1111 '11Iw 111..1\ 'M' .. uh~(·, I h .... 1.111' ,lIwlll" .i1 I.I\C" .dlll ,I ""11.1111)1 If lk Itl p........ 'hl\ I., ieUt·r.lll;I\.l":,\ . .!.. If I~ rt·~Ulrt·U I h;1I I h,' ~ UIUJ ... '''\,·... llIh·llI .. fh" .If ;,",,-
II 't .tI,·" "r t"·, rt r ,.. r). -
Taxable Inco~e ?u~ds
... _------------------------WSJE/HII/1Q1586 FIDELITY INVESTMENTS Discover Fide!iry High Income Fund for tod2y's high bond yields. leI its aggressive ponfolio ofhigher~ielding. medium to l~r quality bonds start '>mrkmg for you today~ Start \\lith just S2 SOO. Choose it for your IRA or Keogh and StlI1 'With just S500. Plus •'l0 sales charge· Free check'Wnong· Easy exc~ges to other Fide!iry funds· 2-1 hour toU-free servlce. like anv bond fund. your jield and share price v.i.l1 var-:-'. For ewnple. on 9/.30/85 High Income's pnce was 59.16 and on 9/30/86 ilWas S9.81. '\nnU2l.lz~V1e1dfnrtilt· dMtnd~ 1()I~,1!t> ~on 2Il ~slurtorn:toi sq 82. :, ~ --- ¢~ /~~ ... ~~ Fidelity High Income Fund Fur mort comolele Informallon. ,"ctudln~ m:ll1:i~t'1TIenl iee- ~na ~'pt'nSt">. clll ;,r .... me ior J fret' pn"pt.'CIu., Rt'~ II atl'Mh heillre ,ou 1O'~1 "r ~nd mont" Fidehl\' OlSlnbulol'5 Lm'!)oraIlOn I General OiSl11buuon ~~en(). PO 8m 0ססoo;. DalI2s. n -;260. Call loU-free 24 hours 1-800-;44-6666
The T. Rowe Price High Yield Fund
ThIs Fund invests l1'1 long-term. medium-to-lower quality bonds Ag~sslve
mana~em~nt helps to provIde hIgh C'U1'1"'E'nt I1lcome and to ~uce rlSi--;.. Yieid
and share pnce will vary. Tne pnce on 10/8i85 was S10~3. and on 10'8186 It
was 510.92. \1irumum l1'1vestment 5l,00J (S300 for !RAs). No ~ c.twges.
Fur tniorrnatlon. call weekdays 8:30 am to 8:00 pm EDT: ~5660.
LRoweInce~In-rest Wth GJnfidenc; ~
T. Jto- Pl"iCY. ro E. ~ S. ~ttnan! MO z;~
PI<!~~ _, ~sW1f1l_com~p
tniarmanon. It'Cludmlt m.Jru~t ~ .no o'np,
c!'l.~ .nd "~1oI!'S' I wUi rua ~ ,""",,,Iv ""'('I"!
I lt1YO!'St or ~ lTlOIW\'
. ~~'a!~ a"";.a,·ze-; pe:c 'Jr '-e >e·,en :ayS enOIr.~ ,CiF::i&6. ~sea or. an ave'a@e ~r:·:e:ler snar~:'
SIO :; i. Av~'a~e ""atumy -::unng rrllS oenQO was lLS years. i ROW'! ?r'ce I",v~s:"'ent Sef'IIC!S. II"C
D'SlrJOUCCr.
Call toU-free24 hours
1-800-;44-6666
D1scO'ler Fidelity High Income Fund for tod.av's high bond
yields, lei itS aggressive portfolio of higher yielding. medium to lower
qualitv bonds Star1 \IoQrkmg formu today~ Start with just 52500,
Choose it for .-our IRA or Keo¢1 and Sta.I1'With just $;00. Plus· ~o
sales charge· Free checbTiang· ~'e.'xchanges to other Fidetitv
funds • 2-i hour toil·free senice.
Like any bond fund. your yield and share price will \"a1!' For
example. on 9/30!85 High Income's price \WS 59,16 and on
913Di86 it \l,<lS S9.81.
Fidelity High Income Fund
For mu(~ comol~(t mionnauon. IndudlOe man:ll/tmffil ;te and
t,\ptn~. ail ur '"me for 111ft prospect~. Re-.u111 c:uduU\ ~io('('
IOU Il!\'es! or -.end mo~, F~il\' DiSlnbulOl'5 CllIl'Ol"WOn t0tnel"11 Dlsmbuuon
'~lJ, PO Bm \JQ()()();.I>~. n ~;2bO,
A Fidelity
~~ InvestmentswSJ EJI-tI I 1 03086
... _------------------------
The T. RDwe Price High Yield Fund This Fund uwests l1'\ long-term. medium-to-lower quality bonds. Aggressive management helps to provide hIgh current l1'\come and to reduce nsk. Yield and share pnce will Vary. "The pnce on 101 22,.85 was 510.39. and on 10/2286 It was 51095. \1inimum investment 51.(0) (5300 for !RAs) No s.«les ch.1rges. For iniormanon. call wei?kdays 8:30 am to 8:00 pm EST: ~5660. LRowePrice~Invest V'hth Connaenc; • T. Ro_ Priet. OJ E. ?an St. ~tunorf!. MD :.~ l'1<o.~ vnd r'N' • proip«Ns wIth IT'Orr com~. INomwnon. tJ'Ciual11~ tTY~~""'tl~ .nd Oln"l .:~r;:~.nd ~~~ I ...·<llrr~ lfCU'ft\IiJV Oo!lorr I ,"~l O. wnd monoN . ~yera~: 3(1:"lwdilZeo Ile~C ~or ~:-:e $C'Ier' :ayS er':Jlr~ :.:,. d.~ .36. :.ca~-=: J;" ~0 av~~a5e OfIC! ~l:!" 5:'" a~~:; S:: ';,3 Average matur:ry ounni mls oer:oo was ". ; years. T ~Qwe ?'lce inveS,mem Se!'ilces.f'c.. D,srnOu(or
'i-day current .vieid • Experienced manage- ment. Scudder is America's oldest no-load mutual fund manager. Vv"e offered one of America's first international funds and have been provid- ing investment counsel since 1919. Expert service. Scudder professionals are ready to serve you when- ever you have a question, need more infonnation or want to make a transaction. • Easy to start. You can invest in Scudder Govern- ment Mortgage Securities Fund with just Sl000. :\nd add to your investment at any time. To get srar:ed, call or write for a tree fact kit. it explains more about the Fund's fluctuating yields and share prices (for example, 10/16/85 and 10/16/86 share prices were $14.91 and $15.35). Your kit also in- cludes everything you' U need to get started. 0/0 • When you cnmpare: It's easy to see why mariy Americans choose the high yields and the high quality of Ginnie Mae funds like Scudder Government Mortgage Securities Fund. Especially when you consider these additional Scudder benefits: CI No sates chaJ'ges. Unlike many Ginnie Mae funds. this Fund has no sales charges or 12b-l fees. 100% of your money works for you 100% of the time. Free exchange. You can move your investment among Scudder's 15 funds with an easy toU-free call. 175 F~de:"31 Street. De;>!. 270. Boston ..\1,.1. 021 II} SCUDDER GOVERMMENT MORTGAGE SECURITIES FUND Americans who want more out of their investments demand high yields and high quality. Many turn to Ginnie Maes, Fannie Maes and Freddie Macs - the mortgage-backed securities in which Scudder Govern- ment Mortgage Securities Fund primarily invests. Investors are earning 8.4%· from the Fund nght now. • High quaUty with high yield. No doubt you're familiar with the high quality of U.S. Government mortgage-backed securities. But have you looked at their high yields compared to other high-quality investments? CI Compare with Trea- suries. u. S. Government mortgage-backed securities offer higher income than you can normally expect from Treasuries of comparable maturity. • Compare with long- I term bonds. Ginnie Maes even offer yields comparable to investment grade bonds. Conuct Scudder Fund Distributors. Inc. for a prospectus conulOmg more complete tniorrnatJon Including management tees and :::\- penses. Read It carefully before you mvest or send mone\' ·8-t'/l'~ IS the Fund's net annualized vleld for the 7 days endmg 10, 16;86. T~e Ivalue of your mvestment l,I,'ill fluctuate. If Interest rates fall. :share pnce will rise. If interest rates nse. share pnce will f.all.
SCUDDER INCOME FUNDli5 Federal Stree~. De:K 620, Boston. \-IA 02110 And you gain added bener1c3 from the foUo'Wing: -low SIOOO minimum initial investment - family of 15 no-load func~ - free exchange among funds - regular statements wlt~ combined reports for investors 111 more char: one fund - quarterly sharehoide::" newsiener :J Join the well-informed Cali or write today for :';i .-:-= information about the Scudder Income Fund anc how to make the Income: strategy work for you. share price will fluctuate. (10117185 and 10/17/86 share prices were $12.34 and $13.25.) • Scudder income stability - since 1928 In addition to Scudder Income Fund's attractive recent perfor- mance. the Fund has paid uninterrupted quarterly di\idends for over 58 years. But even as America's old- est no-load mutual rund. its past results can't guarantee future performance. • And no load can mean even higher returns You pay no loads, no fees, no re- demption or 12b-l charges - no e.xtra costs to reduce your investment return. • For today's environment Many investors are shifting to income producing strategies. Why? There are many rea- sons. including today's low levels of money market rates. By contrast, Scudder Income Fund seeks to provide regular quanerly dividends by invest- ing in income-producing secu- rities such as long-term bonds and dividend-pa)ing common stocks. ill Scudder income perfor- mance - 9.510/0 current yield The Fund is currently producing income at an im- pressive annual rate of 9.51 % .• Of course, like most income oriented investments, this Fund's yield along with its ConUCl xudde~ F'Jnd U's,r:O'ltc..r', illc h-,r J ::lr'l>oe'~:'JS .'mtalnlnll more complele ,nror::utlon ,ncluelng rtUna~emell( Ie::!; ~nc exo.-n,c> "'""_ ~iore VI)U IIlVe;1 'x ;enc r:'lUIll<\ ..~ 5i - I, Inl"l~t' F...:1C, ~lv,cenC ior :nt' last t.....l<I\·t! months dlvleed b\' ItS snare once I>n \v,l7 -~,
SCUDDER GOVERNMENT MORTGAGE SECURIT1ES FUND liS Federal Street. Dept. 124 Boston. MA 12110 Looking for the high yields and high quality of Ginnie Maes, Fannie Maes, and Freddie Y1acs? Consider Scudder Government ~10rtgage Securities Fund. Righi now, the Fund's investors are earning 8.4%.· • High quaUty. High yields. Compare the high quality yields of C. S. Government mortgage- backed seC'Jrities in this Fund to other high-quality 1!TVestmems. a ~mpare with Treasuries. ~1ortgage-backed secuntles offer higher Ulcome than normally expected from Treasuries of comparable maturity. • Compare with long-term bonds. Ginnie Maes even offer yields cOIn?al4ble to investment grade bonds. • When you compare: It's easy to s~ why many Americans 7-day cu~ :Mid choose the high yields and the high quality of Ginnie :>1ae funds like Scudder Government :>lort- gage Securities Fund. Especially when you consider these additional Scudder benefits: • No sales charges. linlike many Ginnie Mae funds. this Fund has no sales charges or 12b-l fees. • Free exchange. You can move your 1!TVestment among Scudder's 15 funds Wlth an easy toll-free call. • Experienc~ manage- ment. Scudder IS America·5 oldest no-load mutual fund rr:a!"!· ager. ~e offered one of Ame::c2·~ lirst intenaoonai funds and ha\'e been providing m.....estme!1t COL:::5~. since 1919. • Expert service. Scucce, professIonals are ready to se;\"e you whenever you have a ql.:estic- need more iniormatlon or .....<ir.: :: make a transac:1O n. ::I Easy to start. IOU c:::: .::..:=~ ....,t."1 just :51000 1.5240 :0, I~':"o - get star.ed. call or v;:-:te :0~ :: :.~-:: fact kit. It exoiams more aDo!.:: :.-,. Fund's fluctuating :.,e!cs ar.:: 5:-,:::-': pnces. (For example. 1O/2~~5 c:" 10/24i86 share pnces we,e .~:~ :-- and 515.38). lOur lat also tnc:'..::=~ ever:;thing you 'Il need to ge~ started. Con~ Scudder Fund Distnoutors. inc for a prospectus conWtUng more compte(e :nior.-:-.auon IJlciUllUllS mm.gemenc fees atIC ~:t:>e!"\se, .'~J(: : ._. beiore you Invest or send mone\·. ·84"'0 's Ule Fund's net mnu.uzed Vlekl (or tile i ~'s en<1J.ng 10:24:;36. The \"alue oi your lJl'ies:~e:-:: .~-.;: ~;';::."J:~ rateS blI. share :mce wUl nse. If interest rates nse. ,hare pnce 'N1!l blI.
€"'Sa THE WAll STREET JOl"R..\'AL TH1:RSDA Y. OCTOBER 23. 1986 :-4
" .
The T. Rowe Price High Yield Fund
In times like these. \~'hen ~'Ields on most Income-oriented investments are falling, where do vou look for
higher current income ~ The 1. Ro\\'e Pnce High Yield Fund capItalizes on some of the best yIelds avaiiaoi~
by invesnng in a diversiried portiolio of long-term. medium to lower quality bonds.
Ag~sive!y lIUnaged for high c~nt income
In pursuit of hIgh cur.ent Income T RO\\'e Pnce bond specialists actively manage the Fund. and dlve!'Sli\' It
O\'er a br0dd range \J! s~untles ,';l:hough yield and share pnce will vary. thIS approach shouid heip ~educe
the greater :"Isks assoCIated l\'lth these t\'pes of securitles, In the 12 months ending 10. 17;86, the hIgh pnce
was 511.26, and the !O\\' I~as 510,38,
Benefit from tax..:leferred compounding for your IRA
rne High Yieid Fund is pamcularlv aopropnate ror lRAs. where the high level of income compounds :ax·
deie!"!'ed. heloi.."i; vour monev zro,,, raster.
You 'U also e-ni('\\' ~ check\\nnng for 5300 or more Plus. with a toll-tTee call. you can purchase, ~e,je~~,
or exchange among our famllv of runds at the then Current net asSet value. The mmunum invesrment IS Si. Lt"'X)
(5300 ror rR.';'Sl. WIth no saJes charges.
For tniormanon. call ',,'eekdavs 8:.30 am to 8:00 pm EDT: 1-800-638-5000.
(,,,
:\l.u to: T. Ro- Prier. 100 EoiSl {'raft 51.. 8aIumore. MIl 21202
Please send r:'1e a h'~ Inlormatlon Iw oInd oro~~T\JS. wlln more
comDlrrr Inrormatlon lncludlnw; manuemrnt 'r~ .nd orMr ch.~s
.nd f"~rues I will rud tnem i:areruU~' berore I Invesl or send money.
Abo send 01 M"H lni0m101t10n kll ior: : IR..... : Jl:A!ogh
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