Mercantile Bancorp is using its new asset allocation mutual funds to fuel a drive for new investors.
The St. Louis banking company will start marketing the funds next month through statement stuffers for savings account holders and in its magazine for elderly customers. Mercantile also plans buy advertisements in St. Louis-area publications.
The new asset allocation service - which will create portfolios by culling from money market, stock, and bond offerings - is a good way for people to get into mutual funds, a bank spokesman said.
"This will allow them to develop a balanced portfolio," the spokesman said.
The asset allocation funds offer three investment approaches for customers to choose from: conservative, which seeks smaller returns in exchange for avoiding risk; moderate, which aims to produce returns from individual shares and income through dividends; and growth, which trades higher risks for potentially greater returns.
The asset allocation funds will build their portfolios from six of Mercantile's 10 ARCH mutual funds, which are overseen by Mississippi Valley Advisors, the banking company's money management arm.
The money managers will shift the allocation funds' holdings as the market changes, in hopes of reducing risk and retaining returns, the spokesman said.
Mercantile has been building its ARCH mutual fund family since 1982, when it was launched with a money market offering. The fund complex had $1.7 billion of assets on Dec. 31, according to Lipper Analytical Services, Summit, N.J.
Mercantile relies on 200 customer service representatives and 20 full- service brokers to offer the funds throughout 249 branches in Missouri, Kansas, Illinois, and Iowa.
