LIPPER SENIOR RESEARCH ANALYST DON CASSIDY ON KTLK AM-760

Thursday, Nov. 20

A. Right. We now have data for November.

Q. And are people regaining a little confidence with the market rallycontinuing?

A. Yes, I would say a moderate amount of confidence, but not a raging"shoot for the moon" mood as yet by any means.

Q. SO, what DID people do in November?

A. Well, they added about $10.5 billion into stock mutual funds, which wasway up from the roughly $2 billion that trickled in during October. Alittle more than a toe in the water, but not exactly wading in hip-deepeither.

Q. What KINDS of funds were people buying?

A. Value more than growth, although both DID get net inflows. Diversifiedmore than sector rifle-shots. Smallcap rather than largecap. A littlenibble at world equity funds, but only the widely diversified kinds, notthe single-region or country ones. And over a billion went into junk-bondfunds, which worries me. Lots of money into money funds, which continuesthe recent trend: about $56 billion, down from $73 billion the prior month.

Q. What about index funds?

A. They again took in a net of about $1.2 billion, just a tiny bit morethan in October, but this month it was a smaller slice of overallstock-fund flows. So people are a LITTLE less cautious, but not realwildly bullish.

Q. How about those technology funds?

A. Again, some signs of slowly rebuilt confidence... they took in about $75million in November, net, which was their best since April. They have hadonly FOUR inflow months in the past 13, and net outflows so far in 2001 are$6.5 billion.

Q. What kinds of bond funds are people buying?

A. Well, they bought $3 billion of them net in November, down from about$13 billion in October. Definitely sticking to the short- andintermediate-term funds. Net outflows in long-term bond funds, as peopledon't like the low interest rates there. A curious split verdict: strongflows into government and high-quality corporate funds, but also flows intojunk funds.

Q. Right, and you mentioned that worries you?

A. When you look at people's behavior, generally they know exactly what isworking and what is not, and they put their money in what has been hot.The one exception is these "high-yield" funds: they have LOST 1.5% so farthis year on average -- the only kind of bond funds with net losses -- andyet people have socked almost $6 billion into them. I'm afraid peopledon't understand their capital is being eroded, and they buy based on yieldalone. And the recession is not over yet!

Q. Switch gears to the Colorado-managed funds. What about flows here?

A. Our local firms took in about $330 million, which is below market sharenationally.

Q. And who got the good inflows?

A. Janus was tops in dollars, with about +$480 million, but a lot of thatwas in money funds. Berger was second, with about +$50 million, andMeridian (the ICON funds) also had nearly $50 million. For THEM that ishuge, representing over 7% of October assets. Some of their sector fundshave done very nicely.

Q. How have assets changed this year, to date?

A. Very interesting picture, and pretty closely parallel to performance byshop.

	Change in total mutual fund assets (flow plus performance)
ICON	+$245 million or 48%
Tempest (Aristata funds)	+2 million or almost +2% very conservative,value type funds
Berger	-462 million or 7.4%
Westcore	-101 million or 20.1%
Janus	-46.2 Billion or 26.1%
Invt Rsch	-13 million or 26.8% small shop
Invesco	-11.5 Billion or 29.9%
Dr/Founders	-1.4 Billion or 30.9%
Marsico	-1.16 Billion or 35.5%
Overall	-60.7 Billion or 26.2%

Outflow was 7.5 billion$; the market ate the rest.

Q. Have the local flows patterns been similar to national totals?

A. In both cases, our Lipper data show that there have been five OUTFLOWmonths and six INFLOW months so far in 2001. And in both cases March andSeptember were the worst and January the best, exactly in line withstock-market trends.

Q. What do you make of it all, Don?

A. People can't seem to break the habit of following current or very recenttrends and thus they tend to buy high and sell low. About the only thingthe flows this year have gotten right is to buy value and smallcap and sellgrowth and largecap. Not sure if that will work well longer term if we arein a new bull market.

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Don Cassidy is a Senior Research Analyst at Lipper specializing in fund flows, exchange-traded funds, (ETFs), closed-end funds, equity fund performance, and author of Trading on Volume (McGraw-HIll).