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Here's one more Top 10 list

^By CHET CURRIER= ^AP Business Writer=

NEW YORK (AP) Since every other publication covering mutual funds seems to be doing it, we thought we'd take a moment today to offer our Top 10 ranking of fund families.

We don't know about such-and-such magazine's or so-and-so newsletter's list, but we can tell you without hesitation that our system of rating each fund family's popularity is purely mathematical and absolutely objective. It counts the votes of every investor who owns any fund shares.

We stress that this system makes no judgment of which family is better at managing funds, providing courteous service to its clientele, or helping people meet specific investment goal. But as a raw measure of popularity, it's quite clear-cut.

How can we do all this? Simply by looking at the amount of assets entrusted to each fund family, by investors who are in most cases free to redeem their holdings and move their money elsewhere any day they choose.

We'll use the latest tabulation of assets and market share from the research firm of Dalbar Inc. as of July. Dalbar's Top 10 rankings generally don't change drastically from one month to the next, except when mergers of large financial firms realign existing families into new groups.

No. 1, with $589.19 billion in its coffers, is Fidelity Investments of Boston, the long-established industry titan that came under heavy fire from its critics a year or two ago, but has more recently been the subject of several comeback stories.

"Did one year really make all the difference? Of course not," says Eric Kobren in his independent newsletter Fidelity Insight. "Fidelity's troubles were never as bad as most commentators claimed."

Fidelity executives themselves have acknowledged that the performance of some of their funds faltered for a time. Kobren says it's too soon to say now whether the firm's managers are ready to rack up winning scores again. "Let's wait until we see a return to sustained market-beating returns," he concludes.

No. 2 is the Vanguard Group, famed for its low-cost management style, at $380.32 billion. Vanguard has been widely heralded as a challenger to Fidelity's king-of-the-hill status, but Fidelity remains half again as big.

In third place, at $257.47 billion, stands Capital Research of Los Angeles, the quiet proprietor of the American Funds family, long the most successful of the "load," or broker-sold, fund groups. It has a $50 billion edge on Merrill Lynch, ranked No. 4 with assets of $197.59 billion.

The rest of the Top Ten: No. 5, Putnam, $178.15 billion; No. 6, Franklin Templeton, $173.75 billion; No. 7, Morgan Stanley Dean Witter, $147.01 billion; No. 8, Invesco, $114.98 billion; No. 9, Smith Barney, $100.34 billion, and No. 10, Scudder Kemper, $96.11 billion.

These standings don't say much about the performance of any individual fud, over either the short term or the long term. Certainly, the size of a fund family by itself tells you nothing conclusive about whether it is likely to do a top job of managing money in the future.

Nor do the raw numbers have much to say about who's been gaining ground or losing ground lately. As it happens, Dalbar reports, Fidelity's market share of 12.83 percent (representing a little more than $1 of every $8 invested in all funds) represented a decline of 0.07 percentage points in July, for the largest loss of market share during the month.

Fidelity, known primarily as a stock-fund shop, had been the biggest market-share gainer in June when the stock market was rising, Dalbar points out. In July, "Fidelity was the most heavily affected by the reversal of June's gain in equity funds," it says.

Vanguard's 8.28 percent share was unchanged from the month before. The biggest market-share gain in July was posted by Janus, a Denver family whose funds have had a big 1998 in the performance race. It picked up 0.09 percentage points to a 1.56 percent share.

Overall, fund industry leaders say the numbers paint a picture of a very competitive business, with some 100 fund families in all. If the recent upheaval in the markets continues, all those families will have a chance to show how well they adapt to change.

(Copyright 1998 by The Associated Press. All Rights Reserved.)