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COMPETITIONThe financial services industry is highly competitive and has increasingly become a global industry.There are approximately 9,700 open-end investment funds of varying sizes, and with varying investmentpolicies and objectives, whose shares are offered to the public in the United States, and there areapproximately 54,000 open-end investment funds whose shares are offered to the public outside the UnitedStates. Due to our international presence and varied product mix, it is difficult to assess our market positionrelative to other asset managers on a worldwide basis, but we believe that we are one of the more widelydiversified asset managers based in the United States. We believe that our equity and fixed-income asset mixcoupled with our global presence will serve our competitive needs well over the long term. We continue tofocus on the performance of our investment products, service to customers and extensive marketing activitiesthrough our strong broker/dealer and other financial institution distribution network as well as with highnet-worth and institutional customers. We believe that performance, diversity of products and customerservice, along with fees and costs, are the primary drivers of competition in the asset management industry.We face strong competition from numerous asset management companies, mutual fund, stockbrokerage and investment banking firms, insurance companies, banks, savings and loan associations andother financial institutions, which offer a wide range of financial and investment management services tothe same institutional accounts, separate accounts, retail investors and high net-worth customers that we areseeking to attract. Over the past decade, a significant number of new asset management firms andinvestment products have been established, increasing competition. Many of our competitors have longstandingand established relationships with broker/dealers and investment adviser customers. Others havefocused on, offer and market specific product lines, which are able to provide strong competition to certainof our asset classes, since we have a broad range of products. Recently, there also has been a trend ofconsolidation in the financial services industry, resulting in stronger competitors, some with greaterfinancial resources and broader distribution channels than our own.We rely largely on intermediaries to distribute and sell our fund shares. We have and continue to pursuesales relationships with all types of intermediaries to broaden our distribution network. We have experiencedincreased costs related to maintaining our distribution channels and we anticipate that this trend will continue.A failure to maintain strong business relationships with the major intermediaries who currently distribute ourproducts may also impair our distribution and sales operations. Any inability to access and successfully sellour products to clients through third-party distribution channels could have a negative effect on our level ofassets under management, related revenues and overall business and financial condition.We maintain an Internet platform to compete with rapidly developing and evolving technologycapabilities. However, technology is subject to rapid change and we cannot guarantee that our competitorsmay not implement more advanced Internet platforms for their products, which could affect our business.We believe that we are well positioned to deal with changes in marketing trends as a result of ouralready extensive advertising activities and broad based marketplace recognition. We conduct advertisingand promotional campaigns through various media sources to promote brand recognition. We advertise inmajor financial publications, as well as on radio, television and the Internet to promote brand namerecognition and to assist our distribution network. Such activities include purchasing network and cableprogramming, sponsorship of sporting events, and extensive newspaper and magazine advertising.Diverse and strong competition affects the banking/finance segment of our business as well, and limitsthe fees that can be charged for our services. For example, in our banking/finance segment we compete withmany types of institutions for consumer loans, including the finance subsidiaries of large automobilemanufacturers, which offer special incentives, including no-interest loans, from time to time to stimulateautomobile sales. These product offerings by our competitors limit the interest rates that we can charge onconsumer loans.22