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Bad news for the mutual fund industry about the slowdown and concentration of net sales has just been compounded. Data shows that the market value of fund companies has declined 14 percent since 1997, while the market value of institutional asset management companies has risen 32 percent.

Charles Schwab & Co. of San Francisco is offering investors a means of participating in some of the potentially high returns of Internet stocks while taking little risk. Schwab is offering two equity-linked certificates of deposit that are federally insured. One of the new CDs has a maturity value linked to the return of the Chicago Board Options Exchange Internet index, said Leslie L. Durschinger, Schwab vice president. The other CD's maturity value is linked to the return of the S&P 500, Durschinger said.

The City of New York's 457 deferred compensation plan, which has $250 million in assets under management, in November will begin offering employees a separate account managed by Citizens Advisers of Portsmouth, N.H. Citizens is the investment adviser to the socially- and environmentally- responsible Citizens Funds.

Kendrick Kam and his new firm, Ingenuity Capital Management LLC of Los Altos, Calif., may add new value-oriented funds in the medical technology sector, according to a proxy statement the firm filed with the SEC Sept. 16. The funds would join Ingenuity's Medical Specialists Fund.

Mutual fund companies are taking steps to attract a share of the small but growing group of mutual fund investors who want tax-efficient funds.

A tight labor market in the mutual fund industry is creating new business for courtroom lawyers - filing suit on behalf of money management firms to enforce the non-compete provisions in executives' employment agreements.

SAN DIEGO, Calif. - Mutual fund companies are beginning to offer new types of funds - and even other kinds of investment products altogether - to remain competitive, said mutual fund executives at a recent industry conference.

Citigroup of New York is developing an unusual Internet fund that will be traded on the American Stock Exchange.

Kinetics Asset Management of New York, the investment adviser of the Internet Fund, has filed with the SEC to offer a no-load fund that will invest in medical companies, especially those that are working on a cure for cancer.

Thomas P. Meehan, a lawyer in Washington, D.C., is planning to offer his own mutual fund, according to a registration statement filed with the SEC Sept. 7. The Meehan Focus Fund, part of the Meehan Mutual Funds, plans to invest in no more than 25 stocks at one time, according to the registration statement. There are no other funds in the family. The no-load fund will follow a value-oriented investment strategy.

SAN DIEGO, Calif. - The Securities and Exchange Commission in November will adopt corporate governance regulations to strengthen the role of independent directors, an SEC official told attendees of the Investment Company Institute's tax and accounting conference here last week. The SEC had initially said it would issue new regulations in the summer.

The SEC, which increasingly is examining the securities trading practices of money managers, has sued an investment adviser for allegedly failing to get the best execution of trades for its clients.

Van Kampen Investment Advisory Corp. of Oakbrook, Ill. and former company chief investment officer Alan Sachtleben have agreed to pay $125,000 in fines for what the SEC said was misleading advertising about the performance of the Van Kampen Growth Fund. The SEC announced the settlement Sept. 8.

Legg Mason of Baltimore, Md., announced that it has acquired Berkshire Asset Management of Wilkes-Barre, Penn., a firm that manages assets for high-net-worth individuals and institutions.

While the open-end fund world has had Internet products on the market for several years, the closed-end world is just now introducing its first Internet fund.

Closed-end fund activist Ronald Olin is asking shareholders of the Portugal Fund to elect Olin's own slate of directors in a vote on opening the closed-end fund. Olin also promises to submit a proposal at the shareholder meeting scheduled for Oct. 15 recommending that, if the Portugal Fund is opened, a proposed 1.5-percent redemption fee be waived.

NASD Regulation has proposed a rule to bar broker/dealers from paying registered representatives more for selling proprietary mutual funds than for selling funds offered by outside fund companies. The practice of paying representatives more for selling house funds can create a conflict of interest between representatives and their clients, NASDR said in issuing the rule proposal Sept. 2. NASDR members have until Oct. 29 to comment on the proposal. In June, NASDR officials said they expected to issue such a proposal to ban extra pay for proprietary sales this summer. (MFMN, 7/12/99)

Metropolitan Life Insurance Co. of New York said it would keep its mutual fund and annuity businesses separate from those of General American Life Insurance Co. of St. Louis, Mo. MetLife announced on Aug. 27 it would acquire General American, which had been unable to repay short-term funding agreements.

Complex derivatives are unnerving that part of the accounting industry that audits mutual funds.

Standard & Poor's and Dow Jones are currently competing to offer new international indexes.