Japan mutual fund industry tallies MMF lessons

The collapse of Japan''s managed money fund industry has given the mutual fund industry a black eye, and investors a lesson about risk.

The last thing Japan's struggling mutual fund industry needed was a scandal, but that's what it got. The trigger came as a surprise: the collapse of US energy trader Enron. But it struck at an area long known to be vulnerable by the industry and regulators: managed money funds (MMFs), unregulated portfolios widely believed by investors and many asset management companies to be as safe as bank deposits.

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