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The harsh realities of the market may be starting to hit the Net-fund pack.

In a Wednesday regulatory filing, the de Leon Internet 100 fund quietly threw in the towel, announcing plans to liquidate the struggling and tiny fund because, "it is no longer economical to operate" it.

Like most, this Net fund run by Paul de Leon of New York-based

Internet 100 Advisors

has struggled in a tough year for Net stocks. Launched in September 1999, the fund is down 12.2% over the last year and has lost a whopping 46.4% since Jan. 1. Both returns rank near the bottom of the tech-fund category, according to


. Internet Index

is down 20.7% over the last year and 51.5% in 2000.

That kind of performance and the preponderance of Net and tech funds out there have made it tough to gather assets. Industry veterans say most funds need to have assets of more than $100 million to make money, and this fund has amassed just $3 million, according to Morningstar. Back in August, the fund's expenses

were raised from 1% to 1.9%, compared to 1.7% for the average tech fund.

With more than 30 funds out there focused on Net stocks and just about all of them

underwater, one wonders if the harsh Darwinism seen among the ranks of struggling dot-coms like


will play out among Net funds too. The situation could become toughest for niche fund shops that rely on their Net fund or funds for all of their revenue.

Jacob Asset Management

, the Net-focused New York fund company run by former


Internet fund manager Ryan Jacob, might come to mind. His


Jacob Internet fund -- the firm's only fund -- is down 64.9% this year.

Kinetics Asset Management

, Jacob's former employer and adviser to the Internet fund, has launched a slew of funds and is starting to branch out from technology with a health care fund and a

planned energy fund.