Eaton Vance Spices Up Its Menu of Products For Bank Customers

Eaton Vance Corp., a mutual fund company known primarily for its fixed- income portfolios, wants to break out of that mold by selling a variety of new specialty funds through banks.

The Boston-based fund company is offering two portfolios that invest in stocks in global "information age" companies in such industries as entertainment, telecommunications, and personal computers.

In addition, Eaton Vance has begun offering funds that invest in corporate loans or non-investment-grade municipal bonds.

Eaton Vance, which manages $14.7 billion in assets, is scrambling to find ways to distinguish itself from large fund companies that dominate the bank channel.

"To its credit, Eaton Vance tries to offer niche products for banks, but bank customers still may not be ready for these types of mutual funds," said Eli Neusner, a consultant with Cerulli Associates, Boston.

Such criticism isn't deterring the fund firm.

The company has begun pushing two portfolios, which make up the Information Age funds, a new series it created only two weeks ago. Eaton Vance is managing the funds in conjunction with Hong Kong-based Lloyd George Management.

These funds,called the Traditional Information Age Fund and Marathon Information Age Fund, hold positions in large- and small-capitalization firms.

Brian Jacobs, senior vice president at Eaton Vance, said banks are asking for funds that will attract more than their traditional older customer base, which seeks tax-free bond funds.

"This is something you can target to younger audiences because they know the companies in the portfolio," Mr. Jacobs said.

Mr. Jacobs is supplying bank brokers with slides and computer diskettes to give presentations to customers about this fund.

The fund executive said 70 banks are selling Eaton Vance's funds. Fixed- income funds contribute 25% of the company's sales through banks.

Another 60% of sales come from another unusual type of fund, known as the Prime Rate Fund. This fund purchases corporate loans made by banks. The funds then pass on the interest that is paid on the loan by the corporation.

Mr. Jacobs said about two-thirds of his bank clients are selling the Prime Rate Fund.

In another effort to introduce high-yield funds, the company is marketing to banks a new municipal bond fund in which 30% to 40% of the portfolio is invested in non-investment-grade bonds.

"Would I like equity sales to get better? Sure, but right now this is the way I can add value," Mr. Jacobs said.

But some are skeptical of Eaton Vance's strategy.

Rolland Johanssen, president of Furash & Co., a Washington consulting firm, said bank customers haven't bought a diversified portfolio at banks, but rather invest in a select one or two funds.

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