(MONEY Magazine) – Q Recently our church was willed $200,000. As a trustee, I want to invest it to protect the principal but also to earn more than the 3% to 5% offered by money-market funds and bank accounts. Please help -- but remember, I don't want to lose my seat on the board. Charles Fletcher Decatur, Ill. A I'm less worried about the wrath of the board than the wrath of the Lord. So, let's pass the buck to Steven Enright, a financial planner in River Vale, N.J. who is willing to take holy heat should things go wrong. Enright recommends a conservative mutual fund portfolio: 40% of the money in a bond fund of securities with three- to four-year maturities, 30% in an income fund and 15% each in a Ginnie Mae fund and a utility-stock fund (for more on low-risk alternatives to CDs, see page 66). His purpose is twofold: to make sure your church's principal stays on the straight and narrow and doesn't stray to the Gulch of Greed; and to encourage the money to be fruitful and multiply -- though in a family-values kind of way. The no-load funds he suggests are: Neuberger & Berman Limited Maturity Bond (30-day yield 5.5%; 800-877-9700); Vanguard's Wellesley Income (6.7%; 215-648-6000) and Fixed-Income GNMA (7.94%); and Fidelity Utilities Income (up 16.49% in the 12 months to June 1; 800-544-6666). If those returns hold for the next year, the church will earn $15,725 -- enough, given its tax-free status, to retool the bell or even put a new roof on the parsonage.

Q Can you suggest no- or low-load mutual funds that invest in Mexican or South American stocks? Lori Murch Elliot New York City A If you thought the lambada was hot, consider the 1991 performance of stock markets south of the border. Even after conversion to dollars, Argentina's exchange shot up 403%, Brazil's 169%, Mexico's 120% and Chile's 105%. To get in on the action will cost you, however. Most U.S. mutual funds active in this part of the globe carry loads -- or sales charges -- as tummy-jolting as a bowlful of salsa. Take the Merrill Lynch Latin America Growth Fund (800-637-7455); it's up 18.8% this year, but imposes a 4% initial fee and another 2% if you redeem during the first year. Or the G.T. Latin America Growth Fund (800-824-1580), which has climbed 22.7% but peels off 4.75% up front. There are at least two no-load funds: Lexington Worldwide Emerging Markets (800-526-0056) and Montgomery Emerging Markets (800-227-4786), but the former has gained only 6.9% this year and the latter is too new (born in March) to have a meaningful record. Hotter profits have come from some of the nine closed-end Latin funds, many of which specialize in stocks of a single country. Smith Barney analyst Michael Porter likes the Brazil Fund ($18.25 a share; up 39.7% this year) and the Latin America Investment Fund ($28; up 25%). But since they trade on the New York Stock Exchange, you'll pay broker's commissions in addition to annual management fees of as much as 1%. My advice: Limit your Latin holdings to no more than 5% of your assets because these markets are volatile. Mexico's dropped nearly 12% during three days in June, for example, only to climb back 6.2% during the next two days. Caramba!

Q I'm 77 and considering investing in low-income housing to get a federal tax credit. Would this be a smart move for me? Michael A. Piekutowski Torrance, Calif. A Since this is an investment from tax hell -- it's that complicated -- please allow me to oversimplify. Under a 1986 law that is expected to be renewed by Congress this year, developers who build or renovate low-income rental housing can often get a tax credit -- a dollar-for-dollar cut in their tax bill -- for 10 years. Some developers have formed limited partnerships to sell units -- and credits -- to the public. Boston Capital Services Inc. (617-439-0077), for example, which has 50,000 low-income rentals in 48 states, says a $10,000 stake usually brings about $1,500 a year in tax credits (the law allows as much as $7,750 a year). So over 10 years, you could save $15,000 in taxes -- $5,000 more than your investment. There are two catches, though. First, the partnership must remain in force for 15 years, meaning you may find it difficult to withdraw your money before age 92. Second, you could lose some of your tax credits if you can't find enough low-income renters to fill the housing (new tenants must earn less than 60% of the area's median income). Though the tax breaks would be smaller, I feel you'd be better off with tax- free California municipal bonds, now paying 6% for a 10-year bond (equal to a taxable 8.3% in the 28% bracket).

Q My money is now in a Wells Fargo savings account earning 3.35% compounded daily. I am thinking of moving $4,000 of it to my credit union where it would earn 5% compounded quarterly. How can I tell which pays more interest? Mara Mitosinka Long Beach, Calif. A Here's the formula: The value of any investment (your $4,000, for example) after one year is equal to the original amount times the quantity ((1+(R/N))) raised to the Nth power, where R is the annual interest rate in decimal form and N is the number of compounding periods in a year. Not so simple. To solve it, you'd need either a special calculator (cost: $20 to $30), a table that has already done the math for you (available in dusty tomes at large libraries) or the patience of a C.P.A. So we've figured it for you. Your $4,000 compounded daily at 3.35% would grow to $4,136.26 after a year in the savings bank -- but to $4,203.78 compounding quarterly at 5% in the credit union. So the credit union wins by $67.52. Moral: A higher interest rate usually beats more frequent compounding.

Q My husband's law firm invests its employees' 401(k) money with Invesco Capital Management in Atlanta. We cannot get any information about this company, and it hasn't provided us with any reports. How could we learn more? Peggy S. Sampson San Diego A To me, at least, the name Invesco sounds like a James Bond creation run by the likes of Goldfinger. The fact that its headquarters are in London makes it seem even more mysterious. But the company is reputable. The Atlanta office you called should have referred you to the Denver branch (800-525-8085) that handles 401(k)s. If your husband phones there (the information is for his eyes only -- get it?), the Denver people will cheerfully send him annual reports and quarterly statements back to the beginning of time -- the same documents he should have received from his law firm. The company has no reason to conceal its performance: Its Financial Industrial Income was up 16.3% in the year ended June 1, and its Financial Tax-Free Income Shares was up 9.9%. In fact, Invesco was rated No. 1 for performance in our ranking of 25 of the nation's leading fund families this month (see page 68). Case closed. Now I'd like a martini dry, shaken not stirred.