As we look forward at the beginning of a new year, the terrorist attacks of last Sept. 11 have put the challenges facing the mutual fund industry in perspective. Especially at this time of year, most of us are thankful for more basic gifts: family, friends and life itself.

But as our concerns turn back to business in the new year, fund executives need to wake up to a sobering message. In sharp contrast to 2000, which saw unprecedented fund flows, 2001 could wind up being one of the worst years for net flows in nearly a decade. With just $103.5 billion in net new assets flowing into stock funds through last October, it is not looking pretty.

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