Mutual fund managers struggle to minimize risk

Mutual fund managers struggle to minimize risk

Turmoil in markets has made the lives of mutual fund managers chaotic. Charged with minimizing risk, managers are fighting subprime-mortgage problems, tough credit conditions and delayed leveraged-buyout deals.

Mutual-fund managers are scrambling to adjust to recent market turbulence.

U.S. diversified-stock funds fell 4.1% in the past month and 1.4% for the past three months, according to Lipper Inc. data through late last week. Among the hardest-hit: real-estate funds, down 14% in the past three months, and financial-services funds, down 8.9% in that time.

Many bond-fund categories are also struggling, including those for bank loans and risky "junk" bonds. Even so-called ultra-short-bond funds sank 0.31% over the past month, according to Morningstar Inc.

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