At the start of 2002, fund families held off merging or liquidating their weaker funds for one quarter while awaiting a market rebound. When it didn't come, fund share class mergers and liquidations skyrocketed back up to their record levels of 2001.

Only 126 fund share classes were merged or liquidated in the first quarter of 2002, according to Thomson Financial's Wealth Management group in Rockville, Md., an affiliate of MFMN publisher Thomson Media. In the previous eight quarters, there were an average of 269 mergers and liquidations per quarter, leading to a record 991 of these transactions in 2000 and 1,005 in 2001, according to Thomson.

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