As worries about the war with Iraq mounted in February, investors pour even more money into bond funds and took out even more from equity funds. All types of funds combined, the industry suffered $32 billion in net outflows in February, according to Lipper of New York.

Lipper expects equity fund flows to take some time to turn positive in 2003, even after stocks demonstrate an upward trend, and that's assuming a best-case scenario in Iraq. Regardless, Lipper expects the asset-management industry to continue to experience pressure on margins.

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