und firms are in a wait-and-see period right now with respect to adding or closing funds, with their decisions hinging on earnings and economic developments, according to Andrew Clark
, a senior research analyst at Lipper
The analyst does not foresee significant additions even in the still-hot fixed-income asset class, especially in high-yield, corporate and mortgage bonds, but views the treasury and international markets as the areas of interest should firms decide to launch new funds. The firm's outlook on fixed-income is of limited capital gains upside for the next quarter.
Year-to-date to October 3, U.S. diversified equity funds fell 27.03 percent and sector stock funds dropped 30.86 percent, while domestic long-term bond funds rose 3.48 percent and world income funds gained 5.53 percent, according to Lipper.
Clark also advocates investors stay with their current asset allocations, especially if heavily weighted toward bonds, and for those predominantly invested in stocks, to also stay the course if under a long time horizon. Equity investors with time horizons of under 10 years should tap professional advice, he says.
Moreover, the looming conflict with Iraq and the consequences of a war pose more uncertainty for the markets and the fund industry, according to Clark. He pointed to the possibility of a long-term "nation-building" effort leading to higher federal deficits -- should just the U.S. and the U.K. have to foot the bill -- as a big concern.
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