The zero percent interest-rate party seems to be winding down. After nearly four years of paying low interest on auto loans and mortgages, Americans are again seeing upward pressure on these and other types of debt.

The Federal Reserve boosted key short-term rates in June 2004 with the promise that more increases would follow. But the correlation between the Fed's actions and the path of consumer interest rates has been murky. For example, the Fed raised short-term rates seven more times in the 11 months after June 2004, yet 30-year mortgage rates remained flat — and even fell slightly — during the period.

Interest-rate fluctuations can be puzzling to the average person and even to some experts. Do you know how your portfolio might be affected by rising rates? If no answer leaps to mind, you might be a good candidate for a bond mutual fund.

Taming the Surly Bonds One of the most important benefits offered by a bond mutual fund is professional management. Bond fund managers are experienced in the bond market. They carefully research, select, and supervise all the debt their funds hold, buying and selling bonds in an effort to maximize a fund's return based on its objectives. Fund managers work not only to help protect your investment from changes in interest rates, but also to potentially profit from these changes.

If you are concerned about how the latest rate increases will affect you, please call. Our goal is to help you evaluate your portfolio.

Mutual funds are sold only by prospectus. Please consider the investment objectives, risks, charges, and expenses carefully before investing. The prospectus, which contains this and other information about the investment company, can be obtained from your financial professional. Be sure to read the prospectus carefully before deciding whether to invest.

Bond funds are subject to the interest-rate, inflation, and credit risks associated with the underlying bonds in the fund. As interest rates rise, bond prices typically fall, which can adversely affect a bond fund's performance. The principal value of bonds and bond funds fluctuates with changes in market conditions. When sold, they may be worth more or less than their initial cost.