In the world of credit cards, platinum is better than gold but in the case of managed funds, Platinum Asset Management may as well be copper for all its share price is doing.

Platinum is the mother-ship of various satellite funds, all invested internationally.

Its price has more than halved since its debut a year ago as a classic bull-market stock - its main assets were Australia's best regarded fund manager, Kerr Neilson, and his staff.

Talk about key-man risk. Losing Neilson for whatever reason would be catastrophic for the company.

There's a fundamental problem for any fund manager in this market - it's harder to hang on to funds when investors are nervous or they can get 8percent from a bank at no risk.

The bigger a fund is, the bigger its profit since it gets more from fees. But in a bear market, the inflow of funds dries up and there can be big outflows as jittery investors look for something safer, which is what's been happening to Platinum.

This becomes a vicious circle where funds drop and so returns and the corresponding fees fall because there's less invested, which pulls down the reported performance, prompting more outflows.

For Platinum, there's the extra difficulty of the currency. All its funds are international and the rising dollar can wreak havoc on returns.

And yet the times suit fund managers like Platinum which thrive on seeking out undervalued companies, though the way its share price is going it could well be a candidate itself.

At least there's a natural bottom thanks to all that compulsory super looking for somewhere to invest.

After a bad run last year, Platinum's main funds are performing better than Australian share funds thanks to the fact it is mostly invested in booming Asia.

The stronger dollar makes it cheaper for Platinum's funds to buy assets in Asia where currencies are undervalued anyway because they're pegged to the falling US dollar. And since it looks for out-of-favour stocks, they're pretty cheap too.

At the recent Morningstar Investment Conference, Neilson said he liked paper and media shares, two sectors you couldn't imagine more out of favour. Er, except banks which, funnily enough, he's not keen on.

Meanwhile, Platinum is setting up an office in Singapore to attract Asian investors.

Its strength is its people - Platinum is 70percent staff-owned - and long-term focus.

The trouble is there are bound to be a lot of unpleasant short terms in the meantime.

Advantages

* Super flows

* Withholding tax cut

* Low cost

* Debt free

Disadvantages

* Stronger dollar

* Credit crunch

* Key man risk

* Out of favour

Verdict

Analysts are divided about short-term prospects, but this is definitely one for the long term.