NBD completing the conversion of collective trust funds to mutuals.

NBD Bancorp is within range of finishing a multiyear effort to convert collective trust funds for employee benefit plans into mutual funds available to all investors.

A big step on that front was taken on June 30, when NBD Bank, the Detroit-based company's lead unit, seeded a new mutual fund with $70 million from three employee benefit trust funds.

Like the trust funds, the new Woodward Capital Growth Fund will buy growth-oriented domestic stocks and American depository receipts.

The Capital Growth Fund was made available to the bank's nontrust customers on Aug. 1, NBD announced last week.

The conversion boosted NBD's proprietary Woodward family to the $6 billion-asset, mark.

The bank now has only two collective employee benefit trust funds that remain to be converted into mutual funds. One of the conversions for a $30 million-asset international trust fund - is slated for the fourth ,quarter, said Richard Foersterling, the NBD first vice president in charge of the Woodward funds.

NO conversion has been scheduled for the other collective investment fund, which buys guaranteed insurance contracts.

NBD began converting its collective employee benefit trust funds in 1989.

These conversions account for all but about $350 million of the money in the 15 portfolios in the Woodward family, Mr. Foersterling said.

The nontrust money was invested by retail customers, most of whom bought the funds from branch-based brokers.

"We think we can do a much better job for our clients through this type of delivery system," Mr. Foesterling said about the conversion of trust funds to mutual funds.

The lead investment adviser for the capital growth fund is Jeffrey C. Veard, a vice president of NBD.

This is the first fund Mr. Veard has. led for NBD, though he helps advise another Woodward fund and is a veteran of the bank's investment research department, Mr. Foersterling said.

For reprint and licensing requests for this article, click here.
MORE FROM AMERICAN BANKER