Q: What's your opinion of my shares of Adobe Systems Inc.? — V.L., via the Internet

A: Adobe Systems has enjoyed strong sales of its Photoshop, Flash, Acrobat and Illustrator software, which are used to create content for print, television and the Internet.

Its Flash video player, for example, is installed on 99 percent of Internet-connected personal computers.

Founded in 1982, the pioneering software firm had some important product launches last year. For example, it released the third version of its Creative Suite software that makes integration between photo, graphics and video software easier.

It also introduced its Visual Communicator 3 software for creating video broadcasts and LifeCycle Enterprise Suite with applications for automating document processes.

But an ongoing concern is whether the firm's core products, despite regular upgrades, are getting a little long in the tooth. It must continue to offer new features to keep these offerings selling. Competition is also mounting, with Acrobat facing rival software from Microsoft Corp.

Adobe shareholders received a jolt when long-time chief executive Bruce Chizen resigned, effective December 1, to "take a step back and figure out what I want to do for the rest of my life." Shantanu Narayen, the president and chief operating officer, replaced him. An engineer who has significantly contributed to the firm's major software programs, Narayen inherited a financially strong company with more than $2.3 billion in cash and no debt.

Shares of Adobe Systems (ADBE) are down 20 percent this year following last year's four percent gain and increases of 11 percent in 2006 and 18 percent in 2005. The company recently announced it would increase its stock buyback program.

The consensus analyst recommendation on Adobe is "buy," according to Thomson Financial. That consists of eight "strong buys," nine "buys," nine "holds," one "underperform" and one "sell."

The acquisition of Macromedia Inc. two years ago allows Adobe to offer bundles of tools used to create content. Yet a lot depends on effective long-term integration of that business into Adobe.

Although Adobe is considered more immune to the effects of a possible recession than many other technology companies because switching from its products requires operator training, the economy is nonetheless a serious concern. Reduced advertising by corporations could negatively impact the creative professionals who are Adobe's bread-and-butter customers.

Adobe earnings are expected to increase 14 percent in its fiscal year ending in November and 15 percent the following fiscal year. The five-year annualised growth rate is forecast at 15 percent.

Q. What types of mutual funds tend to have the highest fees, and is it because some are managed more? — P.C., via the Internet

A. A fund's annual expense ratio is calculated by dividing its operating expenses by the average dollar value of its assets under management.

Operating expenses, which are taken out of the fund's assets and lower the return to investors, include fees to its manager, record keeping, custodial services, taxes, legal expenses, and accounting and auditing fees.

Although fees vary widely, actively managed funds requiring more analysis tend to have higher fees than index funds.

For example, the average annual expense ratio for domestic equity funds is 1.43 percent for actively managed funds, while it is 0.74 percent for index funds, according to Morningstar Inc. For international funds, it is 1.59 percent for the actively managed and 0.96 percent for indexes.

Andrew Leckey answers questions only through the column. Address inquiries to Andrew Leckey, P.O. Box 874702, Tempe, Ariz. 85287-4702, or by e-mail at andrewinv@aol.com.