| | 10/20/97 SHINING A LIGHT ON 'CLOSET INDEX FUNDS' |
 | | What you actually might own is a ''closet index fund.'' That's one with similar volatility and returns as the S&P--but with a sales charge, or ''load,'' as high as 6.5%, plus annual expenses of $1 or more for every $100 invested. |
 | | By comparison, true index funds, which automatically invest in a list of stocks in proportions that reflect the makeup of the S&P, are almost always sold ''no-load,'' with expenses as low as 20 cents of every $100 invested. |
 | | The fund is heavier in energy and financial stocks and lighter in utilities than the S&P. Spokespersons for MFS Massachusetts Investors Trust and State Street Research Investment also emphasized that their funds' sector-by-sector makeup is different from that of the S&P, and the high R2s are coincidental. |
| www.businessweek.com /1997/42/b3549128.htm (1216 words) |