Guidebooks Help Investors Sort Out Choices

You can’t tell the players without a score card. That’s as true with mutual funds as baseball stars. Fortunately, several groups publish fund directories, some of which can be obtained for less than what it costs to spend a day at the ballpark.

These guides list fund names, addresses, phone numbers and certain other key information. They will help you distinguish the American Funds of the investment world from the American Capitals, the American Expresses, the American Investors, the American Nationals, the Advance Americas, the Keystone Americas, the Sun-Americas and the Transamericas, to name a few.

Some guides also include total return numbers for recent years, and a few even rate funds. Most also feature an introductory chapter or two, explaining the various types of mutual funds and how they operate, sometimes with a glossary of investment terms.

A couple of these directories restrict themselves to no-load and low-load funds. This isn’t surprising when you consider that people who take the time to research their investments generally aren’t willing to pay a big sales charge.

Most of these publications can be found in at least some libraries, but they’re sufficiently inexpensive that you won’t mind buying your own copy. Here’s a rundown on some of the more popular and useful guides:

* The Investment Company Institute 1991 Directory of Mutual Funds. This comes closest to being an official guide, since it’s published by the mutual fund industry’s Washington-based trade group. It lists more than 3,000 stock, bond and money market portfolios, categorized by investment objectives.

Unfortunately, the ICI Directory provides only a thumbnail description of each fund. You can find out the name, address, phone number, category, adviser, year began and minimum investment amount, but that’s about it. There’s no performance results, and even the fee information for each fund is vague. The guide, which costs $5, can help you locate funds, but you will need to turn to other sources to continue your research.

* The Investor’s Guide to Low-Cost Mutual Funds, published by the Mutual Fund Education Alliance, costs the same as the ICI Directory but provides more information on a smaller group of portfolios. Notably, it gives total return numbers for the past one and five years, and from each fund’s inception. Plus, the annual expense ratio and the sales charge, if any, are listed.

This publication profiles roughly 325 funds offered by the 18 no-load and low-load families that belong to the MFEA, which bills itself as “the association of no-load funds” even though dozens of portfolios, including some offered by Fidelity, carry sales charges of up to 3%. Unlike most other directories, the Investor’s Guide is published semiannually, in January and July, which helps to keep the performance numbers reasonably fresh.

* IBC/Donoghue’s Money Fund Directory tells just about everything you will want to know about 750 money market portfolios. The wealth of data includes total return figures in each of the past 10 years, the names of managers and details on check writing, if available. There’s also a ranking of top funds over the past five and 10 years, along with an expansive glossary.

A companion publication, Donoghue’s Mutual Funds Almanac, lists essential information on more than 1,900 stock and bond portfolios. You will find 10 years’ worth of performance figures, the names of managers and the frequency and month in which the fund expects to pay capital gains. This is important because it’s generally best to buy shares after the payment date so you don’t have a tax liability on gains you didn’t receive.

The Mutual Funds Almanac sells for $31.95 plus $3 for shipping and handling, while the directory costs $24.95, plus $3. You can get both for $52.95, including shipping and handling. The two publications will furnish most of the information you might need, although their layout is visually bland, with line after line of numbers.

* The Individual Investor’s Guide to No-Load Mutual Funds offers a zippier presentation. Most of the roughly 500 funds profiled get a full-page description. You will find performance, turnover, expense ratio and other data for each of the past five years, plus a summary of the investment objective. You can also learn what percentage of a fund’s assets are held in stocks, bonds, cash and other securities, although this breakdown tends to get dated quickly.

The guide also rates each fund for riskiness, performance in bull markets, performance in bear markets and other aspects. This makes it easier to find promising portfolios at a glance. Plus, you will spot top funds in various investment groups ranked according to superior one- and five-year performance.

The guide is a product of the American Assn. of Individual Investors. The 1990 edition costs $22.95; the ’91 version, due out in June, will sell for $24.95.

* The Handbook for No-Load Fund Investors tracks approximately 1,300 funds, including a few hundred low-loads. You will find total return numbers for each of the past 10 years, plus a mass of other data. The 11th edition (1991), due out in late May, will have an alphabetical listing of portfolio managers, indexed so you can quickly find who runs what.

More than just a directory, the handbook features 24 chapters on mutual funds, explaining the various classifications, how to select winners and more. This section makes the handbook one of the better books on mutual funds anywhere.

Besides these choices, you can find several other higher-priced fund guides and directories, including some that make specific buy, sell or hold recommendations. However, the publications listed above will get you started without requiring a large out-of-pocket investment.

A GUIDE TO THE GUIDES Here’s key information on the mutual fund directories reviewed in the accompanying article. Two groups, the Investment Company Institute and the Mutual Fund Education Alliance, accept mail orders only. Send a check or money order. The other three organizations will accept mail or phone orders. Allow several weeks for delivery.

The ICI 1991 Directory of Mutual Funds, Investment Company Institute, 1600 M St. NW, Suite 600, Washington, D.C. 20036; (202) 293-7700. Price: $5.

The Investor’s Guide to Low-Cost Mutual Funds, Mutual Fund Education Alliance, 1900 Erie St., Suite 120, Kansas City, MO. 64116; (816) 471-1454. Price: $5.

IBC/Donoghue’s Money Fund Directory and/or Donoghue’s Mutual Funds Almanac, Donoghue Organization, 360 Woodland St., Box 8008, Holliston, MA. 01746; (800) 343-5413. Price: $27.95 for the Directory, $34.95 for the Almanac or both for $52.95 (all prices include $3 shipping).

The Individual Investor’s Guide to No-Load Mutual Funds, American Assn. of Individual Investors, 625 N. Michigan Ave., Dept. NLG, Chicago, IL. 60611; (312) 280-0170. Price: $24.95 (includes shipping).

The Handbook for No-Load Fund Investors, Business One Irwin, 1818 Ridge Road, Homewood Ill. 60430; (800) 634-3966 $34.95 plus shipping (about $3).