March 2000: Several high-tech and Internet mutual funds have stopped accepting assets from potential investors in order to remain nimble in such a fast-paced industry. Some funds posted gains of up to 500 percent during 1999 alone. And according to fund tracker Morningstar, there are at least 40 different Internet funds from which to choose.

April 2001: Morningstar publishes a column entitled "Dot-Com Dead Pool for Funds," in which Russ Kinnel, mutual funds editor, predicts low survival odds for struggling Internet and technology funds. After noting that, on average, 38 percent of high-tech funds started in 1999 have lost money and 83 percent of funds started in 2000 are also in the red, Kinnel predicts, "a lot of funds won't make it to 2002."

Now that the tech-stock bubble has burst, mutual fund companies specializing in high-tech and Internet stocks are faced with the daunting task of marketing these funds to skittish investors, many of whom have suffered heavy losses over the last year.

"All you have to do is look at the Wall Street Journal to see that all the advertisements are for bond funds and value funds," said Chris Traulsen, a senior analyst with Morningstar. "You don't see many ads for tech funds anymore."

There is not much that a fund company can say right now to entice investors into its technology funds, Traulsen said. While larger firms can focus their marketing attentions on their other funds, small firms that built their names on one or two tech funds and do not have any other offerings are finding themselves in a bind, he said.

And none of these companies can effectively advertise that their funds are now bargains, he said.

"That's not an overwhelming story to tell," Traulsen said. "You're not going to say, Hey, we've lost 80 percent of our value over the last year, and we don't know when that's going to change, but we're cheap now!'"

Because high-tech funds are foundering so dramatically, many investors, who were lured to such funds in the hopes of earning lottery-like returns, are staying away. As a result, managers of these funds are now focusing on their target investor - financial advisors and aggressive individual investors.

"Tech mutual funds always have been for the high-risk investor," Traulsen said. "We've been saying that these are risky as all get-out, and they should only be for people who can tolerate volatility."

Rowena Itchon, a spokesperson for RS Funds of San Francisco agreed with Traulsen.

"Our high-tech funds are not for the novice investor," she said.

RS Funds has never had a direct to consumer advertising campaign, she said. Instead, the company has relied on co-op advertising through brokerages, such as Charles Schwab and Fidelity Investments.

But, it added state-of-the-art technology to its website earlier this year to cater to its target investor, Itchon said.

"Our website offers high-tech things like streaming video where we can communicate with our current investors what our manager is thinking," Itchon said. "And starting this week, we're adding Palm Pilot access to our services. We are trying to reach our new economy investors in various state-of-the-art ways. And we plan to continue adding new services designed to grab these same types of investors."

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