third quarter, pushing assets under management to $372.8 billion, a 5.8% jump over the previous quarter. Banks' market share dipped slightly from the second quarter's 14.9%, to 14.8%. But that's still well ahead of the year-earlier 13.8%. On Sept. 30, bank and nonbank-managed mutual fund assets totaled $2.51 trillion. The market-share falloff during the quarter is attributable to a sharper increase in assets flowing into nonbank funds. The nonbank fund sector - which has a heavier weighting in stock funds - got an extra boost in the summer bull market. Mellon Bank Corp., PNC Bank Corp., and NationsBank Corp. stayed on top of the heap of bank fund managers, reported Lipper Analytical Services, Summit, N.J. Helped by a healthy dose of assets into money and stock funds, Banc One Corp. moved into the fourth berth, unseating BankAmerica Corp., which dropped down to sixth place. Wells Fargo & Co. rounded off the top five banks with proprietary mutual funds. The family of bank-run mutual funds tracked by Lipper Analytical grew by one, to 119, in the third quarter. Lipper added Resource Companies Inc., the parent of Resource Trust Co.. The firm has managed a small fund for years but had been overlooked by Lipper. There was little movement among the top 25 banks in the rankings, with some shifting one or two spots here and there. But U.S. Trust Corp. fell from 25th to 28th place after losing $938 million of money fund assets in the quarter. London-based Schroders PLC moved into the spot vacated by U.S. Trust. There was more jockeying for position farther down the totem pole as four bank fund families rose or fell more than five spots in the third quarter. Meridian Bancorp. went from 59th to 50th, BanCal Tri-State Corp. moved down to 55th from 47th, and Swiss Bank Corp. moved up to 66th place from 112th after acquiring the Brinson Funds. Indeed, an acquisition also helped push Signet up the ranks to 44th place from 56th, after the bank company completed its purchase of the Blanchard Funds in July. James R. Eads, president of Signet Financial Services, said his bank has also began aggressively marketing a mutual fund asset allocation account that's boosted assets under management. "We've had an exceptional year, primarily because of our asset allocation product," Mr. Eads said. "It now accounts for about two-thirds of all of our investment sales." The falloff of interest rates and the astounding growth of the stock market in the period helped propel some banks with equity and money market funds in the quarter. Bank-managed equity assets rose 9.6%, to $90.2 billion. Assets in money funds grew 4% to $213.7 billion. And municipal-bond funds grew just 2% in the quarter to $31.6 billion. "Interest rates have declined, so much so that you have people looking beyond deposit products," said Thomas N. Munsell, senior vice president and managing director of Fleet Investment Services. "Certainly the performance of the (stock) market has piqued a lot of people's interest in our stock funds." Fleet's stock funds grew 9.7% in the third quarter to $1.87 billion. Banks have traditionally been purveyors of staid managed fixed-income funds, and indeed assets in taxable fixed-income funds grew a modest 5% in the period, to $37.3 billion.

Limited Time Offer

Save $400 off your subscription. Special offer ends April 30, 2017.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.