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Although funds of funds' returns have sagged recently, their managers still expect them to exceed the cost of borrowing.
By comparison, the earnings of investors in traditional mutual funds lagged their funds' returns by 1.1 percentage points.
This left the companies to assume the risk if the funds' returns proved insufficient to meet those defined obligations.
If interest rates rise, this tactic could backfire, pushing the funds' returns down further than those of their underlying securities.
After all, it is only the funds' returns during the preceding decline that are a particularly poor guide.
Mr. Pozen put changes in place that guaranteed that the funds' returns were less volatile, analysts said.
Similar(37)
Meanwhile, the average balanced fund returned over 9.45percentt and domestic equity funds returned 11.85 percent".
Taxable bond funds returned 1.93percentt, according to Morningstar, while municipal bond funds returned 1.4percentt.
Only after he intervened were the funds returned.
General municipal debt funds returned 3.9percentt last year, Lipper said.
Money market funds returned an average of 0.56percentt in 2003.
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