From This Week’s Issue – Investors, Funds Run for Cover

Investors have been running for cover. With 1,038 new fixed-income and 308 new money market funds to hit the market since the beginning of the bear market, fund companies have been keeping pace, hoping to provide shelter from the storm.

If this bear market continues, investors might continue running for cover – right past and out of the equity mutual fund arena, whose assets have fallen 43% from $4.4 trillion to $2.5 trillion since the peak of the market in March 2000.

As much as fund executives might hope they are providing only temporary shelters with such new funds as Fidelity Total Bond and Schwab Hedged Equity, until the market recovers, these might be the only areas of the fund industry to do well.

This week’s special edition of Mutual Fund Market News looks at the various sectors that have held up well, all the while fund industry assets have fallen from $7.3 trillion to $6.3 trillion.

Bond funds, money market funds, exchange traded funds, real estate investment trusts, fixed annuities, hedge funds and separately managed accounts have all garnered tremendous assets in these past three tortuous years.
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Money Management Executive
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