Lehman Brothers Holdings Inc. is bigger and more diversified than Bear Stearns Cos., but investors have been painting both investment banks with a doom-and-gloom brush because of their mortgage and corporate lending exposures.

Lehman, which nosed out Bear as Wall Street’s biggest underwriter of mortgage-backed securities last year and remains in first place this year, isn’t getting credit for its evolution from a bond trading house to a diversified investment bank with an evolving asset-management arm, a strong equities business and a tight control on expenses, some investors say.

“The knee-jerk reaction from portfolio managers is Lehman has more exposure to corporate debt and mergers and mortgages, and therefore we should avoid it,” the chief investment officer of Solaris Asset Management, which manages over $1 billion and does not now own Lehman shares, Tim Ghriskey, said. “It’s a dated view, but at the margin it is probably more exposed.”

Lehman, whose market value of about $29 billion dwarfs Bear Stearns’s $13 billion, booked 48% of its total revenue outside the American last quarter compared with 20% at Bear Stearns. But Lehman is less than half the size of rivals Goldman Sachs Group Inc., Merrill Lynch & Co., and Morgan Stanley, making its exposure to leveraged buyout loans and troubled residential mortgages more of a concern than at bigger rivals. “Lehman’s loan commitments are larger relative to its balance sheet,” the managing member of L&S Partners, a hedge fund that owns shares of Lehman, Michael Lipper, said. “My fear is that it ties up its capital and burns its relationships with some of the private equity guys that drive so much of its earnings.”

Shares of Lehman are down about 31% this year, second only to the 33% shellacking at Bear Stearns, whose mortgage-laden hedge fund problems triggered the summer swoon in financial stocks. On Tuesday, Merrill Lynch analyst Guy Moszkowski downgraded Lehman and Bear Stearns to neutral, saying “their greater dependence on debt markets’s will reduce earnings the rest of this year and next year. Lehman’s shares fell 6% Tuesday, outpacing those of Bear, although Mr. Moskowski said Lehman’s reputation has held up better than Bear’s has.

Lehman’s heavy reliance on originating and securitizing residential mortgages, its stakes in quantitative hedge funds that had a rough early August ride and its strong ties to private-equity clients who are now having trouble raising debt have conspired to make a difficult summer on Wall Street particularly ugly at Lehman, Ghriskey and Lipper said. Some investors also worry about Lehman’s off-balance sheet exposure to poorly performing assets, a concern that Lehman executives have been addressing in recent meetings with large investors.

Last week, Lehman said it will take a $52 million after-tax charge in the third quarter to shutter its subprime unit, BNC Mortgage. That will wipe about 9 cents a share from earnings, estimates, an analyst at Punk Ziegel, Richard Bove, said, but it’s substantially less dramatic than rumors of a billion-dollar mortgage-related loss that some traders were floating earlier this summer.