INVESTMENT OUTLOOK : ASSESSING THE MAJOR MARKETS : Yield, Terms, Services Good Guides to Picking a Fund

When choosing a money fund that’s right for you, experts at the Donoghue Organization and the Investment Company Institute recommend the following:

* Look at a fund’s yield over an extended period, not just a couple of weeks, to see how consistently it has performed compared to other funds. (The Los Angeles Times runs statistics on tax-exempt money market funds every Wednesday and on taxable money funds every Thursday in the Business section.)

* Check the terms, such as the minimum initial investment (the minimum you must invest to open an account) and the minimum deposit (the minimum amount you’re permitted to add each time you make a deposit).

* Check on services, such as whether the fund gives free check writing privileges and the minimum allowable amount of each check; whether the fund provides free wire transfers of funds to an investor’s bank account, and whether the fund allows telephone switching so investors can call to order money moved from the money market fund into other types of mutual funds.

* Decide whether a taxable or tax-exempt fund is best for you. Investors with relatively high incomes would do well to consider funds that invest only in tax-exempt securities.

* Investors who may be interested in switching fairly often among different types of mutual funds, such as between their money market fund and stock and bond funds, would do well to choose a good family of mutual funds that has a good record of performance in their other funds as well as the money market funds.