The Prince George Citizen - Thursday, April 26,1990 - 23 1 560 - 3rd Ave. 564-4434 Open Mon. - Sat. 9-5 Feb. 27 & 28 we’ll be open 9 a.m. - 6 p.m. Spruceland Shopping Centre 562-1157 Open Mon. - Thurs. 9-6 Sat. 9 - 6 Fri. 9 - 9 YOU KNOW YOUR RIGHTS ... BUT DO YOU KNOW YOUR WRONGS? CARSON & I NAUROTH INSURANCE NO FIXED TERM ON INVESTMENT Money market mutual funds grow by BRENDA DALGLISH The Canadian Press There’s another option for savers who want to take advantage of today’s rising interest rates but who don’t want to be locked into an investment for a set time period. Most people put their savings into savings accounts, Canada Savings Bonds, guaranteed investment certificates or, for the more adventurous, treasury bill accounts. They overlook, or in many cases, don’t know about another option — money market mutual funds. Mutual funds are best known, as stock market investments, but in fact special funds exist to invest in everything from foreign stocks to bonds, gold, real estate and the money market. The money market includes short-term government and commercial debt — debt that is outstanding no longer than a year. Unlike the bond market, which fluctuates according to longer-term interest rate expectations, the money market is closely tied to moves in the central bank rate and the prime rate. In the last year as interest rates climbed, money flooded into the 50 or so money market mutual funds available in Canada. One of the best advantages is that investors do not have to lock their money into the fund for a specific term, unlike guaranteed investment certificates or treasury bill accounts. “You can give us the money one day and take it out the next,” says Tony Gage, co-manager of the Phillips Hager and North money market fund, based in Vancouver. This is an advantage for people who, for example, want to put their money into another investment at an appropriate lime or who are planning a major purchase but don’t know exactly when they’ll need cash. Also, it’s just about the only way small investors can buy commercial paper — short-term corporate debt — which pays a higher rate of interest than goverfiment short-term debt such as treasury bills or savings bonds, said Guy Senecal, portfolio manager at Bolton Tremblay in Toronto. Money market mutual funds also diversify risk because they hold a variety of investments, with varying term lengths and varying interest rates. If the fund manager believes interest rates are going to go up, he’ll tend to hold shorter term investments; if he thinks rates are going to fall, he’ll tend to buy longer term paper. Now, for example, the average term of the investments in Gage’s fund is just 25 days. Unlike small investors with modest amounts of cash, however, fund managers can hedge their bets by holding some of both. “Anybody who’s tried to predict interest rate moves, knows how difficult it can be,” Senecal said. In one way, this diversification docs increase uncertainty. An investor who buys a guaranteed investment certificate for a six-month term, for example, knows exactly how much interest will be received. Buying units of a mutual fund that invests in a variety of shortterm investments provides no guarantees of precisely what return will be received six months from now. The return will depend on how accurate the fund manager’s interest rate prediction has been and how well he has chosen individual issues. That’s why it’s important that potential investors find out what the fund’s investment principles are, Senecal said. For example, the Phillips Hager and North fund does not buy anything with a term longer than 90 days. When shopping for a money market investment, follow the rules that apply when looking for any mutual fund: ■ Investigate sales and redemption charges as well as management fees. High sales and redemption charges can wipe out the benefits of even spectacular performance. Many good funds charge only modest management fees. ■ Compare the past performance of all funds in the mutual fund tables in business newspapers. CARTER SUB WAREHOUSE SPACE 6.000 sq. ft. 12.000 sq. ft. 562-5008 or 964-6832 These are the criminal charges you lace it you drink and drive in B.C. • Driving with a Blood Alcohol Content (BAC) in excess of .08%. • Driving While Impaired (even il your BAC is BELOW .08%). • D^ct0 Pr?vide a BrMlh or DRINKING DRIVING Blood Sample. COUNTERAHACK Business Mutual funds I pricM ot knMtiant tun do I Fund* In Ml Mi ot C«iid«. TORONTO (CP) tuppiM by tw bNMkTMit Thwy m tw nwt imM vteu* pw Nun w unit (NAVPS) l*«t circulated by tw tund In accord wic* wlto Ite pricing pucdcw M contterwd In tw prapnctit ot tw lund. rvno •Wi chwgo, g-rwdterpden dwrgo, i-a dhrldtnd, u-US tund*, y-