We last examined changes in the Advisor Perspectives (AP) Universe of Most Popular Mutual Funds in May 2007 . After twelve weeks of substantial market volatility, we revisit this analysis. Our goal is to identify significant sentiment – either positive or negative – among RIAs whose clients are HNW and especially UHNW investors. Our methodology is explained below. We are offering a more comprehensive analysis than we did in May, and in the PDF version we provide complete tables of the 25 funds with the largest current AUM in the full AP Universe, as well as in each of the three tiers based on account size (Largest Accounts, Mid-Sized Accounts, and Smallest Accounts).

As background, below are the changes across the AP Universe over this 12 week period:

Below are some of the significant changes in the AP Universe:

Funds Exhibiting Significant Gains

FCNTX – Fidelity Contrafund Fund

• Moved from 24th to 12th in AP Universe; from 50th to 24th among Largest Accounts; from 3rd to 1st among Mid-Sized Accounts; and 13th to 8th among Smallest Accounts

• AUM grew by 85.5% in the AP Universe

• 989 accounts were added across 11 advisory firms in the AP Universe

• This fund showed considerable growth across the entire AP Universe
  

GATEX – Gateway Fund

• Moved from 32nd to 20th in the AP Universe and from 28th to 19th among the Largest Accounts

• AUM grew by 50.5% in the AP Universe and by 49.2% among the Largest Accounts

• 329 accounts were added across 2 advisory firms in the AP Universe; 145 accounts were added across 2 advisory firms among the Largest Accounts

• This fund showed considerable growth across the Largest Accounts
  

FDVLX – Fidelity Value Fund

• Moved from 55th to 25th in AP Universe; from 92nd to 53rd among the Largest Accounts; from 13th to 4th among the Mid-Sized Accounts; and from 34th to 25th among the Smallest Accounts

• AUM grew by 79% across the AP Universe

• Fund was added to 54 accounts across 3 advisors in the AP Universe

• This fund showed considerable growth across the AP Universe, although the growth was across only three new advisory firms
  

Funds Exhibiting Significant Losses

EWJ – IShares MSCI Japan IN

• Fund went from 6th to 9th across the AP Universe and from 6th to 8th among the Largest Accounts

• AUM dropped by 8.95% across the AP Universe and by 9.01% among the Largest Accounts

• Fund is used in 50 fewer accounts across the AP Universe, and 49 of these were among the Largest Accounts

• Fund is used by 2 more advisory firms

• This fund showed considerable defections among existing advisors within the Largest Accounts
  

FEQIX – Fidelity Income Fund

• Fund went from 21st to 41st across the AP Universe; from 35th to 57th among Largest Accounts; and from 4th to 11th among Mid-Sized Accounts

• AUM dropped by 34% across the AP Universe and by 43% among the Mid-Sized Accounts

• Fund is used in 1,094 fewer accounts across the AP Universe, 673 if these among Mid-Sized Accounts

• Fund is used by 2 more advisory firms

• This fund showed considerable defections, particularly among the Mid-Sized Accounts
  

Methodology

We rank funds by the assets under management (AUM) within our universe. A fund's ranking can improve or decline only if its AUM changes relative to other funds. Such changes can be due to any of the following:

• Existing advisors shifting money into/out of existing accounts

• Existing advisors putting money into of new accounts, or closing existing accounts

• New advisors putting money into new accounts

• Gains or losses in AUM due to fund performance

• Funds moving from the mid-sized account tier to the largest account tier, and vice versa
  

In some cases, funds moved down in ranking, but their AUM increased and the number of advisors utilizing the funds remained constant, as did the number of accounts holding the funds. We do not consider this a significant change in sentiment regarding the fund, which is our guiding criterion in this analysis. We look for situations where one or -more often- more of the following occurred:

• Change in fund ranking

• Change in AUM beyond what would be expected due to fund performance

• Increase or decrease in the number of advisors using the fund

• Increase or decrease in the number of accounts holding the fund
  

We also eliminate situations where changes in fund usage were due to movements between account tiers. Some subjective judgment comes into play. We do not have a single objective metric or standard that allows us to measure changes in the universe. But we believe that the examples we show above exhibit evidence of changes in advisor/investor sentiment. We are providing the criteria we used to select these funds, so you can be the final judge as to whether the change in advisor/investor sentiment is significant.

Finally, we consolidate holdings across share classes for a given fund. The ticker symbol displayed is the first symbol, alphabetically, among the various share classes. It may not be representative of the share class or classes held in the AP universe.

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