Bond Fund Rally Resulted In Best Returns Since 1991

After scaring many investors away with a poor performance in 1994, bond mutual funds rallied in 1995 with their best showing in four years.

The average taxable bond fund returned 15.22 percent last year, for the biggest gain since 1991, the research firm of Lipper Analytical Services reported.

The rally more than made up for a negative return in 1994 of 3.28 percent. But some investors who fled bonds and bond funds during or after that decline most likely missed the rebound.

Lipper analysts caution that 1996 could bring another change of direction, possibly sending rates higher and prices of existing bonds - and net asset values of bond funds - lower.

“Interest rates could be closer to the bottom than to the top,” the firm said in its yearend report on fixed-income funds.

“While interest rates could fall some more, each drop brings the decline closer to the bottom.”

Top-quality corporate bond funds returned 18.46 percent, outgaining high-yield, or “junk bond,” corporate funds, which rose 16.44 percent.

Lipper said world income funds gained 18.04 percent and “emerging market” bond funds, concentrating on newer and smaller capitalist economies, did even better, climbing 20.12 percent.

Pension rights explained

How do pension plans work? When can you expect to start receiving your benefits? And what happens to your pension plan if your company collapses?

You can find answers to these and other questions in the government booklet, “What You Should Know About Your Pension Rights.”

The 48-page booklet also shows how pension plans can provide benefits to your spouse after you die.

For your free copy, write: U.S. Department of Labor, Pension and Welfare Benefits Administration, One Bowdoin Square, Seventh Floor, Boston, MA 02114.

You need not send a letter; a postcard will do, said spokesman Edmund T. Fitzgerald. But be sure to include your name and address, and ask for the booklet by name, he said.

NASD complaint number

For information about how to file a complaint against a broker or seek arbitration of a dispute, investors can call the National Association of Securities Dealers headquarters in Washington at (202) 973-7000.

New 1040s on old paper

That 1040 income tax form delivered courtesy of the IRS has at least one good thing going for it.

It’s printed on recycled paper made entirely of old newspapers and magazines. So you can feel good about the environment while you figure out how much you owe Uncle Sam.

International Paper, which calls the grade Springhill Incentive 100(R), says the off-white shade will even help avoid any eyestrain you might suffer in filling in all those numbers. Is there no end to your government’s thoughtfulness?

, DataTimes