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THE HERALD April 17 Page IS Money Matters Mutual funds an attractive alternative ByPAULJROCKEL Becoming a successful investor usually takes at least a lot of investment experience and a great deal of free time to monitor changes in market condi tions as they happen Right Yet there is an attractive alter native for individual investors who have not got that much cash time or experience mutual funds Managed by professionals mutual funds enable investors to pool their money together and to diversify their investments while remaining liquid By not concen trating all their money in one in vestment investors reduce their risk As well their money is available any time they may need it In choosing a fund the investor must decide which fund is most compatible with his or her per sonal investment philosophy In vestors in Canada can choose from more than 400 mutual funds They reflect a wide variety of in vestment philosophies from the ultraconservative to the highly speculative Their portfolios may include common stocks bonds mortgages foreign common stocks preferred shares precious metals treasury bills real estate or a combination of these types of investments Each funds portfolio is selected by a professional manager or group of managers who decide what to buy and sell The majority of mutual funds in Canada are openended allowing investors to invest or withdraw their money at any time The number of shares or units a new investor receives depends on the value of these assets at that time Of course when new investors join a mutual fund they add their money to the pool of the other in vestors contributions thereby in creasing the funds total assets When an investor redeems his ITS YOUR MONEY Paul J Rocket shares or units the amount of money received depends upon the value of those assets then Each unit or share which represents a small fraction of the funds total assets has a net asset value known as The underlying value of the securities in the fund determines the value of the units or shares The NAV is calculated by taking all the funds assets subtracting ad ministrative expenses and dividing the remaining figure by the number of shares or units outstanding Less popular with investors are closedend funds Unlike open- end funds these funds have a fix ed number of shares outstanding They are usually traded on an open Stock Exchange and sell for less than their underlying value Closedend funds have a limited following in Canada The value of most openend mutual funds is determined on a daily basis at the close of the stock markets some are valued on a weekly basis while others mainly featuring real estate investments are valued monthly Most mutual funds can be bought or sold on a daily basis Mutual fund investors are most often charged a fee for getting in to the fund and for the funds ongoing management Some funds charge a sales commission referred to as a frontend load which can be as high as nine per cent but is negotiable depending on size Yet some funds charge no load at ail Some funds charge backend loads a fixed percen tage of the funds value charged to the investor upon redemption of his investment This percen tage is variable and usually declines over time Professionals continually debate whether load funds outperform noload funds However when mutual funds are bought as a longterm investment the load becomes very in significant provided the fund delivers positive returns Costs for the on going manage ment of the fund generally range from to 2 per cent of assets administrative costs of your Investment a year These costs are reduced by the fact that the investments of thousands of shareholders are being managed by one manager This is con siderably less than the fees an in vestor would pay to his or her own professional money manager These fees are paid by the fund itself not by individual accounts When choosing a mutual fund do so carefully There are many funds in the market Some have consistently performed well while others have not been con sistent Decide what your own in vestment goals are Know what your investment philosophy is tak with an independent advisor who can choose between the many different mutual fund companies to custom tailor in- vestments to your needs For free Information contact Peter C Regal Capital Planners Ltd ID Drive Georgetown Ontario or phone Paul J Rockel is the author of the best seller Why I Invest In Mutual Funds and President of Regal Capital Planners Ltd Recession hits Ontario hardest The folks in British Columbia can be forgiven for wondering why business writers wail and la ment about the economy Since the recession began last April 21000 new jobs been created In the province Albertans too are asking what the fuss is about Thanks to a strong energy sector 12000 new jobs have emerged in Alberta over the past year Wheres the Your Business by Matey Thomson Service In Ontario thats where There have been 226000 jobs that vanished in Ontario in the first year of the recession This com pares with jobs that were lost in the first year of the recession Manitoba is not faring well either Jobs are disappear ing at more than twice the rate they did in the previous reces sion The numbers could be misleading Companies have been much quicker to lay people off this time than they were in Thus the devastation in On tario could moderate over the next six months ONTARIO ALONE Another thing distinguishes this recession from the previous one Forecasters have been waiting for other provinces to follow Ontario down This is not likely to happen The problems that beset Ontario are related to manufacturing real estate and retail trade Alberta and British Columbia for example are more resource- based Inflation allowed Ontarios manufacturing sector to grow fat and inefficient economists say According to Michael Walker ex ecutive director of the Fraser In stitute of Vancouver Ontario is now undergoing the restructuring that was done by British Colum bia and Alberta in the mid1980s The last recession was par ticularly tough on natural resource industries The result was that most of them went through a toptobottom house cleaning to encourage economic efficiency he said Ontario is just now taking some of the steps that we in the West went through from 1982 to 1985 HOW THEY FARED Here is how employment has changed over the past year com pared with the first year of previous recession The numbers were prepared by Statistics In Newfoundland jobs have been lost compared with in the first year of the previous recession Prince Ed ward Island lost compared with Nova Scotia lost compared with 10000 New Brunswick lost compared with Quebec lost 81000 compared with 184000 Manitoba lost compared with Saskatchewan lost compared with Alberta gained 12000 com pared with a loss of 31000 in 198182 British Columbia gained compared with a loss of INSURANCE ON YOUR Liberty Mutual Insurance Company Brian Rosa Queen St East Brampton Ontario Guarantee the costs of rebuilding 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