Mutual fund marketers, like lots of people aiming to make money through the Internet, have high hopes that the worldwide computer network will attract legions of new customers.

"What we're talking about is, quite frankly, one of the greatest communications opportunities in the history of mutual funds,'' The Vanguard Group's Brian Mattes told participants yesterday at a conference on the industry.

Vanguard's Internet site daily attracts " thousands'' of investors, some of whom ended up investing in the group's funds, he said. Mr. Mattes, who is a vice president of public relations for Vanguard, would not release the figures but said it was a profitable marketing effort.

A study by Lou Harris and Baruch College indicates nearly 30 percent of the 40 million adults on the Internet in the US have used it as a tool for getting investor information, he said. With the number of users predicted to rise to 125 million in two years marketers are vying for business.

About 150 US fund groups are currently using the Internet to store prospectuses, annual reports and other information, which is then available to investors whenever they want. About 12 of the fund groups are offering redemption and exchange services, while several are handling on-line purchases.

However, marketing and sales on the Internet poses "one of the most vexing and frustrating situations,'' for the industry, he said.

As the relatively unregulated Wild West of the communications frontier the Internet has also posed a significant problem for regulators. Confronted with the ease with which fund companies can now market and sell their funds they have set up a confusing mix of regulatory policies and practices.

"Strung across our path, however, are stands of regulatory controls, drawn from every country, that have formed a Gordian knot of regulatory problems,'' he said.

Fund groups must therefore tread carefully in how they present their Internet sites and who they allow to become shareholders. Without clear guidelines he foresees a conflict between mutual fund distributors, investors who demand increasing amounts of information, and regulators concerned with cross-border transactions. He believes the weight of the demand will force the regulators to adjust their policies.

"Regulatory barriers will simply have to be adjusted, perhaps through an internationally cooperative effort,'' he said. "But while regulations may give way to market forces, they must not give up on maintaining investor protections.'' Once the regulatory bonds are relaxed he predicts that the Internet could bring marketers to the "brink of perfect communications'' with investors.

"We will, for the first time, have the ability to communicate with our current and prospective shareholders immediately, continuously, and at an extremely low cost,'' he said.

Since the medium also allows investors to communicate with each other through discussion groups a firm must keep track of what kind of information is being exchanged. For investors, the Internet allows a cheap method of comparison shopping among fund groups. But the possibility for the spread of false information abounds.

"This new communications ability means that a firm's reputation will become increasingly important while, ironically, being placed at greater risk.'' Mr.

Mattes said.

The next step for the industry is to make on-line sales easier and more secure. Last week's experiment by Visa International, which successfully completed the world's first cross-border sale on the Internet using Secure Electronic Transaction standards, is the breakthrough fund companies are looking for. Visa made a purchase in Taiwan from Singapore.

"While this sale involved merchandise, cross-border sales of mutual funds could be handled the same way, and very soon,'' he said.

Mr. Mattes spoke at a panel discussion during yesterday's session of the 8th Annual Globalisation of Mutual Funds conference at the Southampton Princess.

The conference, which began Monday, ends today. About 440 delegates are in attendance.