European Stars And Stripes (Newspaper) - September 6, 1987, Darmstadt, Hesse Page 20 the stars and stripes sunday september 6,1967 investor s guide by Bill Doyle q. Yon hire consistently advised your renders to steer Clear of morn funds with hb-1 plan. 1 paid Little attention id your warning because none of the funds in which i own stares Hai such a plan. How Ever 1 now an being solicited to invest in a fund with a 12b-l plan. Please explain 12b-l plaits in particular where did that unusual Nunt lab a plan originate a. The name comes from Rule i2b-l, adopted by the securities and Exchange commission in 1980. That Rule allows the manage ment of a Mutual fund with such a plan to us part of ire fund s assets to pay marketing expenses on the Sale of new shares. At some Mutual fund with 12b-l Doyle plans up to 1.2 percent of the funds assets Are spent annually on marketing expenses. Those expenses include commissions to brokers who sell fund shares sales literature and Public reunions. The important Point to keep in mind is that a Mutual fund s asset belong to the fund s shareholders not its management. The Sec seemed to ignore that Point when it caved in to fund management types and adopted Rule 12b-1. If a fund s management us a a i2b-l plan to dip into the fund assets existing shareholders Are forced to pay the Cost of bringing new shareholders into the fund. That Cost can be substantial. If you own $10,000 Worth of shares in a Mutual fund and 1.25 percent of the fund s assets arc spent annually on marketing through a i2b-l plan $125 will disappear from your investment each year. Those i2b-l expenses Are in addition to the fund s other operating expenses. Although Many Mutual funds do not have 12b-l plans All have operating expenses for the typical Mutual fund the biggest operating expense is the advisory or management fee paid to the people who run the fund and pick the securities i which the fund invests. That fee usually runs about one half of 1 percent of fund assets. Other costs for such things As shareholder services custodian accounting Legal auditing and prospectus printing increase a fund s operating expenses. When a fund s management does a Good Job hold ing costs Down it should be Able to keep total annual expenses below three Quarter of 1 percent certainly no higher than 1 percent a i2b-l plan can More than double a Mutual fund s annual operating expenses. Q. How Ore distribution and marketing costs Psid la the Case of Mutual fund that has no lab a plan a. If it s a Load fund Hose expenses Are paid out of the commis Sions investors Are charged alien they Purchase the fund s shares. Some funds Levy redemption fees or contingent deferred sales charges when investors Cash in their shares. The Money from those rear end loads often pay distribution and marketing costs. If it s a True no Load fund with no front Load no rear end Load and no 12b-l plan manage ment pays the distribution and marketing costs out of the advis Ory fee it collects from fund. Business news stocks stage 2nd weekly Retreat by Ellen freilichup1 business writer new York most Stock prices re treated for the second week in a Row As Dollar and interest rate worries gave the Market its weakest showing since mid May the Dow Jones Industrial average fell 77.97 during the week to 2s6i.38 after falling 70.15 Points the week before. In its iwo Weck decline last May the Dow lost about 80 Points. The Blue Chip barometer set a record close of 2722.42 . 25.the Dow posted a 23.60-Poinl gain monday but retreated every Day thereafter As investors watched the Dollar fall to its lowest level in three months against the German Mark and . Treasury Bond yields Rise briefly to 9.5 percent their highest Levels of the was volatile throughout the week. A seemingly Small loss thursday of 2.55 Points in the Dow disguised widespread losses in the Overall Market and did not reflect the fact that the Dow climbed 23 Points in the first few min utes of trading and was Down about 25 Points by midday. Analysts said the intense Selling of thelast two weeks is Likely 10 produce a re Active Bounce this week. My Short term indicators show the Market to be As oversold As it has been since the end of May when the april May correction ended said Ai Goldman technical analyst at , Goldman. Goldman said the number of investors who have become pessimistic about the Market s near term prospects has in creased sharply. This combined with major league bloodletting in the Dol Lar and in Bonds creates the conditions for a knee Jerk Bounce Goldman said. That Bounce could push the Dow into the 2650-2670 area he said. Goldman said inc Market is in the Middle of a month or two month Lon correction thai began . 26. On the trading floor Union electric was the most Active nose listed Issue falling a to 23. Ohio Edison followed falling to 2 1 it. At to was third slipping to 32/i. Among other Blue chips general elec tric Feu 2ft to 59k, ism drooped 5tt to 160%. American express slipped w to35ft, Eastman Kodak skidded vhf to 95w, Philip Morris lost 2ft to 113 cow Peirni be my Nyu Chi Fehm Moil Attenb by volum Glo Edh a i you Nuggie Orts at to in mail Gimian unwed Telp vol own Eimi be tld4.4m.sw 4ik s 1,j7 40 14 2.097 1� 1 s.7 39 1,871,400 31 4 15.00 81 1.st1joo s9h 2.62 230 2.2 1.592.T 32 01 2340 3.6 1.474.000 190 t m 220 ? i.171.mo is l,1i1.900 4011.36 30.0 969.700 in 1.74210 9m.400 Al 08 m 10 Ali per my 1,503.200 6h in Loffl a\3 634.100 s3 is 7� 13.0 cum in s12.boo 2k 0.07 340 thu air 610.dw 27-4 Wingle 64.000 i7k 0.9drinvd 410.boo in Vine w3.st 339.boo 25w 15.3eblbfki 311.100 48 i 14 440 0.1 he nerd 183.300 14 Etc Bill b 174.4co 2b�amu coffin Lulu Siml hit of Ting cd o n. 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B98n.l 4199nl 13hl . 12 m 1272 94hnl. 9.15 2452nl 17-99 647nl 9.61 no 17.21 n i so tit 811 6m �19 s07 17191131 477 4 6 111514594b4 Job 9s2 1040 647 676501 Sal to 7331u 744 11071479 Bio 9bs 10111104sn Brih third Quarter operating loss As it has for the last two years. Coca cola eased -4 to sch. It said it will merge its entertainment business sector Inlo tristan pictures Cray research plunged 16 to 96w on news it and discontinued in most advanced supercomputer project. National semiconductor Rose in to6vt in Active trading. Its agreement to buy Schlumb Rcck s Fairchild semiconductor unit would make the company the nation s third largest Chi maker. Newmont mining Rose set to 88vl t. Boone Pickens or s Ivanhoe partners offered to buy the company for $95 a share. G. Heileman brewing jumped by to 42ft. It got a s3b-a-share takeover ofter from Bond corporation holdings ltd.,Australia s second Lar cat Brewer. The limited plummeted 6 a to 40%. It reported a 14 percent Rise in Augustale compared with the same month last year but Only a 2 percent increase at stores that were open in both periods. Overall declining issues outnumbered Miner 1,462-Jto among the 2,179 new York Stock Exchange issues changing hands. The number of shares changing hands on the new York Stock Exchange during the week totalled 853,696,190, compare with 878,936,360 a week before and 659,897,200 shares traded during the same week a year ago. The Dow transportation Index fell38.59 to 1023.45. The interest rate Sensi Tive Dow Utility Index fell 3.49 to 201.52. Standard & poor s 500-Stock Index felt10.34 to 316.7d and the new York Stock Exchange composite Index dropped 5,41 10177.58. Volume of nose listed issues including trades in stocks on regional exchanges and Over the counter totalled 999,075,280 shares compared with 1,026,513,630 in inc previous session. Prices Slid in Active trading on the american Stock Exchange. 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