Thirty-four bank-managed mutual funds made a high-profile tally of the biggest, the best, and the worst mutual funds in the country.
Their showing in the Wall Street Journal's most recent quarterly ranking is yet another sign of how banks are entering the mutual fund mainstream.
For example, a bank-managed stock fund was counted among the 50 best performers over the past 10 years. This is remarkable, because even the most seasoned banks in the field started operating stock funds only in the late 1980s.
The portfolio, the Pilot international equity fund, is the only member of Boatmen's Bancshares new Pilot Funds family to be mentioned in the Journal supplement.
But the St. Louis-based banking company can't take the credit for the fund's success. The portfolio was previously run by a money management unit of Kleinwort Benson. Kleinwort still acts as investment adviser, while Boatmen's manages the business side of the fund.
Three bank-managed mutual funds edged their way onto the Journal's ranking of the 50 best stock funds over five years.
Leading the pack was the institutional class of First of America Bank Corp.'s Parkstone Small Cap mutual fund, which was 43d on the list. The institutional class of First Interstate Bancorp's Westcore Midco Growth mutual fund was 46th, while the A class of Chase Manhattan Corp.'s Vista Capital Growth fund was 49th.
Five-year returns for these funds ranged from 115% to 117%.
Mellon Bank Corp., which is by far the largest mutual fund manager among banks by virtue of its acquisition of Dreyfus Corp., was the only banking company to make the Journal's ranking of the 50 worst-performing stock funds over five years.
Two of its mutual funds made the list: the institutional class of the Dreyfus-Laurel Investor fund, and the A class of the Dreyfus Capital Value fund. Over five years, these two funds posted measly returns of 0.49% and 2.56%, respectively.
Mellon's mutual funds fared better in other categories. For example, two of its funds rated among the top 10 flexible funds last year. Another rated among last year's top 10 balanced funds. And two of its money market funds rated among the top 10 in yields last year.
Ironically, a BankAmerica Corp. fund, the Pacific Horizon Prime Value, also rated as a top-performing money market mutual fund last year. The San Francisco-based banking company gained notoriety last year for bailing out two other money market portfolios for $67.9 million of derivatives losses.
A small-capitalization stock fund managed by Bankers Trust New York Corp. was the only bank-managed fund among the 50 best stock funds last year. Portfolios managed by five banks were among the year's worst performers: Bank Julius Baer & Co., Credit Suisse, One Valley Bank, Marine Midland Banks Inc., and Mellon.
Only one bank fund made the rankings of the country's largest mutual funds, Dreyfus Liquid Assets. It was the 10th-largest money market mutual fund, with $4.9 billion of assets.