Consumers are becoming disillusioned with mutual funds, according to a survey conducted for a Houston-based mutual fund company.

American Capital Management and Research said its index of investor sentiment fell to 232 in May from 275 in April.

The index is at its lowest level since January. The survey, which polls 1,000 randomly selected consumers, was begun in November by Delta Strategies, Austin, Tex.

The findings indicate that the market's gyrations this year are taking their toll, said Donald A. McMullen, president of American Capital. "The public is cautious about the overall prospects for investing."

But seasoned investors saw opportunities. They were more inclined to put money in stocks, bonds, and funds in May.

"Knowledgeable investors appear to feel this is merely a correction in a bull market, not the start of a bear market," Mr. McMullen said.

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