Seeking the right family: should one company manage all your mutual funds?(Buyers Guide)(Cover Story)(Directory)

It's a jungle out there for mutual-fund investors. Thousands of funds beckon, their number thickened like tropical vines by the addition of scores more every year. Each has its own intrepid guide, a fund manager with a self-promoted knack for selecting promising stocks or bonds. But investing in any single fund could leave you swinging between outsize returns one year and, as was often the case in 2000, stunning losses the next. Spreading your money around could unleash a typhoon of account statements and leave you with a tangle of holdings that doesn't add up to a coherent investment plan.

Many investors try to cut through the undergrowth by consolidating all of their holdings in a single mutual-fund family. These one-stop financial-shopping agglomerations offer stock, bond, and money-market funds--even check writing and bill paying--that make it easy to assemble a well-balanced portfolio and cash-management plan under one roof. Several have even turned themselves into financial supermarkets, offering access to hundreds of funds from other investment firms. The fund families provide the simplicity of single-statement account balances and consolidated tax-record-keeping. Increasingly, they are promoting investment and financial-planning advice and developing web sites packed with calculators, analysts' reports, and password-protected online access that lets you trade securities or shift assets among accounts.

Does your investment program need a family life? This report can help you decide. Our look into the 12 largest no-load fund families analyzes their range of offerings and how they are managed. In partnership with Morningstar, the Chicago mutual-fund research firm, we rated their performance as measured by their long-term total returns. Then, tapping the expertise of Kanon Bloch Carre, a Boston investment-advisory firm, we evaluated how much you can expect to pay in annual expenses and ranked the fund families accordingly. Because so many investors now are buying, selling, and gathering research on the Internet, we also visited each company's web site. Finally, we compiled an inventory of the extras offered by each firm, including check writing, brokerage services, and access to outside mutual funds.

To qualify for inclusion in our study, an investment firm had to offer no-load no-commission) funds in five broad fund categories: domestic stocks, international stocks, taxable bonds, municipal (tax-free) bonds, and money markets. The fund families range in size from well-known giants like Fidelity Investments of Boston, with nearly 1.6 trillion under management and 304 stock and bond funds, to more boutique-like houses such as the $47 billion Strong Funds of Milwaukee, with 57. And when you look beyond their ram, schooner, and lighthouse logos, you discover each has a distinct personality that may appeal to some investors and turn off others. Some companies are oriented toward risk-takers; others lean toward clients who prefer turtle-like steadiness.

FAMILY ACHIEVERS: PERFORMANCE

Stock funds sold by the big fund families have long figured prominently on our annual listings of top performers. Over the past five years, the 12 investment companies we evaluated for this report supplied 43 percent of all of our top fund picks. (For this year's top equity-fund listings, see "Survival of the Fittest," page 32.)

It takes more than one or two superstar funds to make a solid fund family. Investors need consistency across all major asset classes--from funds that specialize in high-flying growth stocks to ones focused on sedate government bonds. But even the best of families harbors the occasional delinquent offspring, Morningstar researchers found.