Data from CDA/Weisenberger show that bank returns beat nonbanks in the fixed-income, equity, and mixed categories for the three months ended Dec. 31.
Experts credit banks' conservative investment approach for the gains they made in the fourth quarter. Banks had a more limited exposure to Asian economics ills, they said, and generally did not pursue aggressive- growth stocks.
"Banks look at funds a little bit more conservatively because that is what you have expected from banks in the past," said Daniel L. Phelps, a senior analyst for CDA/Wiesenberger. "They might invest more in blue-chip issues, staying away from your historically aggressive categories in order to provide their investors a little bit more stable returns.
"There are some funds on the nonbank side which are going to drag down the general equity average, only because they are more aggressive in nature," he added.
Banks' equity funds averaged a loss of 3.14% in the fourth quarter, but they still outperformed those of nonbanks by 1.32 percentage points.
Average returns for banks' fixed-income funds were 2.19%, 16 basis points better than those of nonbanks.
For mixed funds, banks saw average returns of 0.66%, while nonbanks saw -0.18%
"We had an extremely minor exposure to direct investments in the Asian or the international side that would involve Asia," said Lawrence S. Kash, vice chairman of Mellon Bank Corp.'s Dreyfus Corp. "So we did not have a significant effect from emerging market funds and an international fund that had investments in those economies."
