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To: Moominoid who wrote (11046)	11/9/2001 9:51:57 PM
From: Mark Adams	Read Replies (2) \| Respond to of 74559

I think what happens in the US is simple. Investment groups approach small and medium size business proposing to help them set up employee benefit plans (401k and their ilk) for free, but in doing so they provide the fund selections the employees are allowed to choose from. These funds often have a sales load and performance may or may not match leading edge funds where the manager actually works his you know what off trying to get the right choices at the right prices. The fund companies win, as they have a steadily increasing pool of assets under management, which they get a slice of, plus the sales fees if any. A variant of this is the merger, where the purchasing company migrates existing 401k money into 'approved' funds. Quite common in banks, where the approved funds are also those that the bank happens to run through a subsidary. Like I said, I'm pretty cynical when it comes to mutual funds- there are some good ones, but figuring out which 100 out of 6000 takes some work. And the good ones are rarely part of the 401k selection menu.

To: Moominoid who wrote (11046)	11/9/2001 10:27:51 PM
From: LLCF	Read Replies (1) \| Respond to of 74559

<, but new inflows can get directed to the better funds.> As I mentioned to Pezzy boy, one of the most talked about shortcomings in looking at performance [other than short term data being statistically insignificant] is that it many mutual fund groups are looking at the way folks chase after the best performance 'lately' and they are afraid to NOT be in the market, or hotest sector, REGARDLESS of what their training [or common sense] tells them. Of course that's the problem of the individual fund... ie. they're too wimpy just say "we don't care if clients leave... they're stupid if the do." But, saying "performance" is what keeps the funds profit motive in line with the clients best interest is not as clear cut flawless as it seems. DAK