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To: SirRealist who wrote (85128)	3/6/2003 11:05:26 AM
From: 2MAR$	Read Replies (1) \| Respond to of 208838

U.S. fund firms try to woo back investors Thursday March 6, 10:58 am ET By Martha Graybow NEW YORK, March 6 (Reuters) - Attention stock investors: The mutual fund industry wants you back. Fund firms are cutting prices, rolling out new portfolios aimed at conservative investors and retooling underperforming funds in an attempt to woo back the investors who have yanked billions of dollars from their funds over the past year. "Fund companies are thinking, 'what can we do to attract money back here and get investors to stop sitting on their hands?'" said Laura Pavlenko Lutton, an analyst at research firm Morningstar Inc. "It will be interesting to see whether or not the fund companies are successful in attracting new money in this type of environment." Pitching stock funds is a hard sell at a time when stocks are down and investors are leery of committing any new money to the stock market because of worries about a potential war with Iraq and the health of the economy. Stock-fund investors, as well as fund firms, are reeling after three years of portfolio losses. The average diversified U.S. stock fund is down an average 13 percent for each of the past three years, according to research firm Lipper Inc. Last year marked the first year since 1988 that investors pulled more money out of U.S. stock funds than they added. Investors pulled about $27.1 billion from stock funds in 2002, while depositing $140.5 billion into bond funds, according to industry data. PRICE-CUTTING With stock-fund investing so unpopular these days, some fund firms are trying to make their offerings more appealing to beaten-down investors. Fidelity Investments (News - Websites), the No. 1 U.S. fund firm, recently waived the front-end sales charge on the massive Fidelity Contrafund (Nasdaq:FCNTX - News) through the end of June. Fidelity also eliminated similar sales charges on nine international funds. Fidelity said waiving the Contrafund charge might encourage investors who overlooked the fund in the past to reconsider. The fund has outperformed its peers -- it ranks in the top 5 percent of its large-company-blend peers over the past five years, according to Morningstar -- but it still had net outflows of about $4 billion over the past two years, Fidelity spokesman John Brockelman said. The Contrafund's assets stood at $26.7 billion at the end of January, down from a peak of $48 billion in March 2000. Some fund firms have reopened portfolios that had been shuttered to new investors during the bull market. Janus Capital Management, whose once-hot growth funds have tumbled, has reopened some funds, including its flagship Janus Fund (Nasdaq:JANSX - News), in an effort to boost their asset levels. Fund manager changes also have been rife across the industry as fund companies try to pull underperforming portfolios out of the doldrums. New York-based Neuberger Berman Inc. (NYSE:NEU - News) recently fired its Boston-based team of growth managers and hired a team of stock pickers from Northern Trust Corp. (NasdaqNM:NTRS - News) in Chicago to replace them.