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Huge Appetite. M.I.T.'s aggressive leadership spawned a whole line of imitators and variations: ¶ The unrestricted common stock funds such as M.I.T., which like to keep a balance between dividend and growth stocks. ¶ The growth funds, which are concerned not with dividends but with long-term capital gains (M.I.T.'s own growth fund). ¶ The balanced funds (Philadelphia's Wellington Fund), which keep their money in both stocks and bonds and shift the balance as the market changes. ¶ The income funds, liked by elderly or retired investors, which concentrate on high-yielding stocks (Manhattan's National Securities).
¶ The frankly speculative funds (Townsend Growth and Keystone 8-4 funds), which warn the investor that the risks are greater, along with the rewards.
Says M.I.T.'s Robinson: "Within their range, mutual funds can fit the need of almost any investor." They can also find a host of critics. Many critics charge that the funds, along with other institutional buyers, have needled the roaring bull market to artificial highs, that their constant buying, chiefly of blue chips, has helped create the present shortage of stocks. The funds' answer: they hold only 3.4% of all stock on the New York Stock Exchange, and do not hoard it; they turn their shares over faster than the exchange as a whole.
More important is the charge that, in a falling market, millions of panicky, inexperienced shareholders would redeem their shares, forcing the funds to liquidate huge blocks of stock and collapse the market. But Robinson cites the record to show that just the opposite has always occurred: more fund investors turn in their shares in a rising market, fewer in a falling market, thus making the funds a balancing force. This may be the shareholder's form of profit-taking, but it is more likely a sign of his confidence in the funds; when the market is uncertain, he feels safer with his money in mutual funds, but when he thinks it is heading for the sky, he succumbs to the temptation to take his money and get into a more lively stock.
The Very Model. Few men are better suited to present the public image of trust and integrity fostered by the funds than Dwight Robinson. He is the very model of a Proper Bostonian, from his steel-rimmed spectacles and dark, conservative suits—he always wears a vest in the office —to his clubs (Union, Longwood Cricket) and his finely polished sense of discretion.
He is mild in manner, mellow in voice, retiring with all but his closest friends. He is an Overseer of Harvard, like his father before him, and a conscientious do-gooder who actively aids many a fund drive and charitable organization. Though he makes more money ($402,389 last year) than all but a handful of men in U.S. industry, he lives modestly, thriftily drives a 1955 Oldsmobile. He speaks and eats sparingly, never smokes, has a single drink of Scotch each evening (with an occasional "dividend").