Funds of funds show signs of recovery

The industry, still off its peak by 43%, narrows losses from the first half of 2009 to finish the year down 10%.

By Niki Natarajan

For funds of funds, the Bernie Madoff effect finally seems to have worn off. Though these funds—particularly those directly invested in the Madoff Ponzi scheme—were badly burned by losses and redemptions in 2008 and the first half of 2009, performance gains and new money appear to have helped the industry to find more stable footing in the last half of the year.

The

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