Banks may be gaining on nonbanks in the race for top-notch returns as portfolio managers for institutional investors, a leading pension consulting firm has concluded.

Specifically, Rogers Casey & Associates Inc., Darien, Conn., found that in the fourth quarter banks did about as well as nonbanks in managing investment portfolios for pension funds and other institutional investors.

The data showed a marked improvement for banks' investment performance, which over the long term has been much worse than that of nonbank rivals.

"The data really come through strong," said Adele Langie Heller, an associate director at Rogers Casey. "If the trend is true, we might see the difference disappear altogether."

Many bankers have bristled at the often repeated claim that banks in general are worse at investing money than nonbank brokerages and money management firms.

Unfortunately for banks, Rogers Casey's data support this reputation, at least over the long term.

For example, the median returns of bank-managed equity portfolios tracked by Rogers Casey trail the median returns of a benchmark group of leading money managers by 1.4% to 1.5% over three, five, and 10 years.

Even in fixed-income instruments, a reputed specialty of banks, bank- managed portfolios have lagged. Median returns of the bank group trailed those of the benchmark group by 0.2% to 0.6% over the three-year, five- year, and 10-year periods.

The benchmark group consists almost entirely of nonbanks and includes data from more than 300 individually managed institutional investment accounts.

The bank group consists of more than 129 portfolios. Most of these are so-called commingled trust funds, a type of investment vehicle that is a specialty of banks.

Also included in the bank group are individual accounts managed by banks, though Ms. Heller said these accounts are more common at nonbanks.

Although they trail over the long term, Ms. Heller said, banks can take encouragement from more recent data. For example, in the fourth quarter, the median return of bank-managed equity portfolios was a negative 0.9%, slightly better than the negative 1% return posted by the benchmark group.

Median returns for fixed-income portfolios managed by both groups were 0.4%.

Ms. Heller said that banks appear to be benefiting from moves to hire talented money managers and to buy top-notch money management firms.

Bankers had mixed reactions to the Rogers Casey research. Richard K. Wagoner, chief investment officer of the capital management group at Charlotte, N.C.-based First Union Corp., said it seemed unfair to conclude that banks have been inferior money managers.

Instead, he said, banks tend to be relatively conservative investors. This may have hurt their investment performance when markets boomed over much of the last decade, but helped when markets were rocky last year.

But Brenton H. Dickson, chief investment strategist for State Street Boston Corp.'s money management unit, said the data appear to give an accurate portrait of banks' investment performance relative to nonbanks'.

Many banks, including State Street, have striven with considerable success in recent years to reach the top ranks of money managers, he said.

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