Burned in Enron's Flameout: Mutual Funds

Enron (ENRNQ ) employees who watched their retirement savings disappear aren't the only ones who have been hurt by the energy trader's collapse. Some of the nation's most popular mutual funds -- which pool cash of many thousands of investors -- held large stakes in the now-busted stock.

Whether they were in sector funds like Rydex Utilities Adv (RYAUX ) or giant index funds like the Vanguard 500 (VFINX ), shares of this once-mighty stock -- now trading for pennies -- abounded. Also, bond funds held heaps of the Houston corporation's debt, with some having unusually high exposure equaling 4% or more of net-asset value. In the next few weeks, those caught with a large position when the company imploded last fall will report more meager returns for the fourth quarter than they otherwise would have. How much of a hit depends on how big a chunk of Enron was in their portfolio, what they paid, and at what price they bailed (see table, ).