Last year was the first time since the crash of 1987 that investors pulled more money, $27 billion, from stock funds than they added and the fund industry isnt taking it sitting down.
"Fund companies are thinking, What can we do to attract money back here and get investors to stop sitting on their hands?" Laura Pavlenko Lutton, an analyst with
Meanwhile, in a separate article, "Comfort in Insured Funds, at a Price," Reuters notes how principal-protection fund assets have increased 12 times in one year to $6.25 billion by the end of 2002. Financial advisers, however, warn investors against the complexity of the terms of many principal-protection funds, including lengthy holding periods and high fees.
"The fine print to these funds is mind-numbing," Brian Portnoy, a Morningstar analyst, told Reuters. "As a fund analyst, I can say that they rank as some of the most complicated investments that I have ever encountered."
