Even though advertising spending in the mutual fund industry has been higher this year than in previous years, the trend could abruptly reverse if the U.S. economy falters in the coming year, said financial analysts.

Mutual fund companies spent a total of $258.2 million on advertising through August, according to Competitive Media Reporting of New York.

This amounts to an 18 percent increase over the $218 million the industry spent in the same period in 1999, said Melissa Gensler, a spokesperson for the company. The August figures are the latest available, she said.

If spending continues at the same rate, the mutual fund industry will top $385 million by the close of this year, the report said. In 1999, the industry spent a total of $325.5 million on advertising and $331 million in 1998.

Janus Capital Corp. of Denver led the industry this year, spending $30.8 million on advertising through August. In 1999, Janus spent a total of $25.6 million on advertising.

Fidelity Investments of Boston was second, spending $16 million on advertising through August. In 1999 the company topped the list, spending a total of $39.9 million for the year and $23.3 million for the first eight months of the year.

Strong Capital Management of Menomonee Falls, Wis. spent $14.1 million through August 2000 compared to $9.6 million for all of 1999.

"I think that with all this advertising, [top ad-spending companies] are trying to highlight their 12-month performance, especially while there still are some 1999 returns in there before we get past year-end, since returns were so strong," said Kristin Ademonis, analyst with Financial Research Corp. of Boston. The performance numbers themselves are a very strong advertising tool, she said.

Advertising spending in the mutual fund industry has definitely increased over the last couple of years, according to Ademonis. And the slowing of the U.S. economy in the second half of this year has not slowed ad spending, she said.

"I think there is still a strong advertising push, especially since sales are slowing," she said. "Mutual fund companies want to keep their names out there, within the public and recognizable."

Advertising strategy has shifted toward performance, said Ademonis. As an example, she cited the recent strategy change by Fidelity.

"In the past, they had Peter Lynch and they were kind of focused on education about investing," Admonis said. "Their new advertising campaign is focused on performance numbers."

Many smaller companies, especially if they had a very successful fund, like a technology or Internet fund, have also focused on performance, she said. These companies may not be that recognizable among the public, so they are trying to get their message across using their strong performance numbers.

Future ad spending will depend on the U.S. economy, said Ademonis.

"Advertising hasn't declined yet in the end of 2000 because companies are still trying to keep their names out there in the minds of investors," she said.

Strong Capital Management pulled in more than $2 billion in assets through August, compared to $44 million for all of 1999. The company's advertising campaign has been successful, said Jody Lowe, a company spokesperson. The company's marketing executives declined to comment further.

Fidelity did not share Strong's successes. At the end of August, Fidelity had pulled in only $5 billion in net money compared to $20.3 billion at the same time last year, according to Financial Research Corp.

Geoffrey Bobroff, president of Bobroff Consultants of East Greenwich, R.I. said that Fidelity's worries are not over.

"The dollars spent by these companies were spent during the first half of the year for the most part, when the market was still quite strong," he said. "We had a lot of strong performance on a trailing twelve-month basis. But this is over. Many investors that were excited about it aren't very happy right now because the overall investment results have turned south with the market."

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