Mutual Funds.  Know What You're Getting With Index Funds  Many
Jump Into These Investments Without Really Knowing What Their
Function Is  February 05, 1997|By Charles A. Jaffe, The Boston
Globe.  There is an adage in investing that you should never buy
what you don't understand.  For the better part of two decades,
this is why individuals didn't buy index funds.  But in recent
years, indexing has been pitched as being the solution to
complex investment decisions. The result, according to
Morningstar Inc., is that assets in U.S. index funds hit $93
billion in 1996, triple the total from 1994.  Mutual Fund Trim
Tabs, a trade publication, estimates that 15 to 20 percent of
all money entering funds in January went to index funds. And, in
perhaps the ultimate sign that indexing is a viable option, fund
companies that disdained index offerings are now developing
their own, most notably Fidelity Investments.  That activity
notwithstanding, many investors still don't know how index funds
work or for whom they best wo