Last year's tough markets hurt most mutual funds.
But bank-managed mutual funds suffered less on average than funds managed by nonbanks, an analysis by market researcher CDA/Wiesenberger shows.
Specifically, bank-managed equity, bond, and mixed portfolios turned in performances that ranged from a third to a half of one percent better than all funds in these categories.
To be sure, all mutual funds - even those managed by banks - on average lost money for investors both in the fourth quarter and in 1994, according to Rockville, Md.-based CDA.
In equity portfolios, losses amounted to 2.32% on average, and 2.02% for bank-managed funds. Likewise, taxable bond mutual funds tanked 3.57%, while bank-managed portfolios sunk 3.04%
The banks' edge was said by some experts to be the result of their traditionally conservative investment tactics.
"I think its characteristic," said A. Michael Lipper, president of Lipper Analytical Services Inc., Summit, N.J.
For example, Mr. Lipper said, high-quality, big company stocks, value stocks with relatively low price to earnings ratios, and short-term fixed income instruments performed better in 1994 than other, riskier investments.
He said these more conservative investments are more typical of bank mutual fund families than of nonbank families.
Likewise, Mr. Lipper said, many bank mutual fund returns were aided by fund managers who waived expenses to give a lift to new portfolios.
But bank-managed mutual funds weren't only plain-vanilla players. A few funds rated among the brightest investment stories last year. Others were among the ugliest.
Among the best stories was Societe Generale's SoGen Overseas Fund, which was launched in 1993. This mutual fund posted a total return last year of 7.79%, the best of any bank-managed equity fund, and among the top 5% of the nearly 2,000 equity funds tracked by CDA.
The Overseas fund is one of two portfolios managed by the Paris banking giant's star stock-picker, Jean-Marie Eveillard, 54, a Parisian who now lives in New York.
Mr. Eveillard's other portfolio, the SoGen International Fund, ranks in the top one-sixth of equity mutual funds in total return over the past 10 years. It was the second-best performer among bank-managed portfolios in the same period. Last year the international fund had a respectable total return of 2.52%.
But Mr. Eveillard has done more than make money for investors. He has also raked in cash for Societe. Specifically, more than $1.5 billion has flowed into his two portfolios over the past two years, according to a company spokesman. The money has come mostly from retail investors who buy the fund through brokers and financial planners. So much money has flowed in that last year the international fund was closed to new investors.
At the other end of the performance spectrum, Huntington Bancshares, Columbus, Ohio, managed the worst-performing bank mutual funds.
These two funds, separate share classes of the Monitor Mortgage Securities portfolio, declined in value by a quarter.
And no wonder. The sub-adviser who ran the $65 million portfolio was Worth Bruntjen, whose infamous derivative investments were said to have lost some $700 million for the clients of Piper Jaffray Cos.
But the losses haven't soured Huntington's relations with Piper Jaffray.
Norman A. Jacobs, president of Huntington's trust bank, said the institution is retaining Piper as an investment manager for the funds, because its record in previous years was strong. He also said Huntington is not a party to any of the litigation surrounding Mr. Bruntjen's losses.
