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Generating investment

Merrill Lynch Investment Managers is getting plugged into the world of

heat, light and water with the world utilities fund.

Based in Luxemburg, world utilities is a Sicav aimed at investors looking

for a low to medium-risk fund. It will invest in companies that supply

electricity, water and gas. It will also target companies that are involved

in new energy technologies such as wind power, solar energy, coastal

barrages and small microturbines.

Half the fund will invest in the US, with 20 per cent in Europe, 20 per

cent in Asia and 10 per cent in Latin America.

The fund will be managed by Walter Rogers in New York. He joined Merrill

Lynch in 1987 and has been managing the Merrill Lynch utilities and

telecommunications fund since 1990.

Deregulation is affecting utility companies all over the world as

governments loosen their grip on the energy and water sectors. Utilities

can be a safer investment during times of market volatility as they tend to

be driven by increasing demand and by internal developments such as mergers

of utilities providers. But recent events such as power blackouts in

California have shown that deregulation can go too far and may represent

too big a risk for some investors.

According to Standard & Poor&#39s the Merrill Lynch energy fund is ranked

fourth out of five funds in its sector, based on £1,000 invested on a

bid-to-bid basis with gross income reinvested over three years to April 16,

2001.

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