Most of our business lines are performing well, although we have seen a significant increase in the level of our mutual fund redemptions. Additionally, we are incurring higher operating costs as we expand our investment capabilities, mutual fund product lines, distribution and electronic commerce activities. We believe that these investments for the future will improve our product breadth and distribution capabilities over the longer term. However, based on currently available data, we now expect that these factors will likely cause us to achieve low single-digit growth in our net operating earnings for fiscal year 2000. Asset Management Overview Liberty Financial s asset management businesses earn fees for managing and administering the assets of retail and institutional investors.
Structured finance continues to be an emerging and potentially high-growth business for the company.
Newport Pacific, Progress Investment Management, and Stein Roe have all won significant institutional mandates from a broad range of clients in the public and private sectors. During the first quarter of 2000, our mutual fund redemption rate increased to 32 percent, up from an average of 25 percent in 1999. The company is currently analyzing the increase in redemptions to determine what changes, if any, can be made to its product line-up, distribution or services to improve the rate of redemptions, and will continue to monitor the related impact on the company s future operating results. The company also incurred higher operating expenses in the first quarter of 2000, primarily related to the expansion of investment management capabilities, mutual fund product lines, distribution and electronic commerce activities. The company expects this higher level of costs to continue during the year and believes it is necessary to position Liberty Financial for long term success in the asset management business.