The Halo Effect
By Jesse Freund

(Business 2.0) – Last year's scandals cast a pall over the $7 trillion mutual fund industry, but bottom-line damage has mostly been limited to a few prominent offenders like Putnam Investments and Janus Capital. Companies that remained untarnished, like T. Rowe Price, have actually seen sales surge, as the bull market stampedes investors into funds. When T. Rowe announces first-quarter earnings in late April, it's expected to report net flows nearly four times as high as a year ago. The stock is up 13 percent this year, but watch the company's guidance. Other fund companies have predicted that increased regulation will eat into future profits.