Mutual funds

IJL Wachovia of Winston-Salem, N.C. recently established the Wachovia Investment Fund, a portfolio managed by undergraduates at the University of North Carolina at Chapel Hill. IJL Wachovia provides $50,000 for students to invest, along with substantial institutional support.

Investors who use investment strategies that center on dollar-cost-averaging or asset allocation may be able to reap greater returns with a variable annuity than they can with mutual funds, according to a study released last month by the National Association for Variable Annuities.

When the going gets tough, fund advisers get creative.

NEW YORK - Exchange-traded funds, funds that invest a majority of their portfolios in a variety of stock market indexes, pose a serious challenge to closed-end equity funds, according to some industry analysts.

In the past two years, wirehouses like Bear Stearns, Morgan Stanley and PaineWebber have introduced mutual funds that invest in stocks that are recommended by their firms' equity analysts.

TORONTO - Mackenzie Financial, the largest Canadian fund company selling through independent brokers and dealers, has launched a low-fee class of units aimed at stemming defections by its richest customers.

An institutional real estate investment advisor is planning to offer a new real estate-oriented mutual fund.

The Warburg Pincus Funds early next year will add a large company growth fund and merge two similar funds, according to SEC filings and a company spokesperson.

Charles Schwab & Co. of San Francisco has reached an agreement with OffRoad Capital Corporation, also of San Francisco, to offer private equity investments to Schwab customers.

Only three mutual funds track the Dow Jones Industrial Average while 118 funds track the S&P 500, according to Lipper of Summit, N.J. However, because the change in the Dow index that took effect Nov. 1 is likely to greatly improve its performance, a number of mutual fund companies might bring Dow Jones index funds to market, according to portfolio managers and researchers.

The mutual fund arm of Bank of America of Charlotte, N.C. plans to offer three new funds next year, according to a registration statement that the Nations Funds Trust filed with the SEC Oct. 25. The funds include the Nations Mid-Cap Index, High Yield and Kansas Intermediate Municipal Bond funds, according to the registration statement. Banc of America Advisors of Charlotte will advise the funds. The Nations Funds family already includes over 60 funds.

William H. Miller III, one of the most successful managers in the mutual fund industry and a key to Legg Mason's success in fund sales, has formed a new company with Legg Mason which will manage a new Miller-run fund, possibly by year end.

A new technology fund that promises to invest in Internet companies, is also socially responsible, putting it in a class of its own among technology funds.

Charles Schwab Investment Management of San Francisco is taking steps to provide more investment flexibility for the managers of Schwab's four MarketManager funds of funds.

Actively-managed mutual funds have been out of favor in recent months because of two rapidly developing trends. Funds pegged to a market index, like Standard & Poor's 500, have gained in popularity, not only because they can outperform many actively-managed funds, but because they take less of a bite out of an investor's earnings through low management fees. In addition, the popularity of Internet stocks has drawn investors away from activelymanaged funds to invest in individual Internet stocks.

Like Frankenstein and his monster, RREEF America of Chicago is bringing a mutual fund back to life. The money manager is bringing out a twin of one of its old real estate funds even though it merged a similar fund with American Century Investments of Kansas City, Mo. two years ago.

Money managers, mostly small ones, have been registering Internet fund products with the SEC at a rapid rate.

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.

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.