MARCO ISLAND, Fla. - BankAmerica Corp. is stepping up its drive to get more retail investors into its mutual funds.
The company is about to launch its first advertising campaign in nine years for the Pacific Horizon mutual funds, said Debra McGinty-Poteet, a senior vice president at the San Francisco-based banking company.
Speaking at a bank mutual fund conference, Ms. McGinty-Poteet said the company also plans marketing campaigns aimed at Asian and Hispanic investors. And it will market its mutual funds more aggressively to people with individual retirement accounts.
"We're looking at getting a good solid grip on retail," Ms. McGinty Poteet told the conference sponsored by the American Banker.
In the 12 years since it launched its mutual funds, BankAmerica has concentrated on selling them to institutional investors. Though it has been laying the groundwork for a retail push since mid-1993, few concrete measures have been announced up until now.
Ms. McGinty-Poteet noted that targeting institutional investors has helped BankAmerica's funds amass substantial assets. They held $9.3 billion as of yearend, making them the fifth-largest fund family managed by a banking company, according to Lipper Analytical Services, Summit, N.J.
But the institutional focus has also taken its toll. When interest rates rose early this year, these investors pulled billions of dollars out of two BankAmerica money market funds, inflating losses the funds were incurring on derivatives.
BankAmerica committed $67.9 million to make the funds whole. Ms. McGinty-Poteet did not discuss the losses in her speech. But she did say that because of unspecified management changes, BankAmerica was now interested in cultivating a more stable set of retail investors.
To that end, BankAmerica has devised a multi-pronged retail strategy. Key elements include:
*Targeting Asian and Hispanic investors. One element of this approach will be to translate mutual fund prospectuses and marketing materials into languages other than English.
Ms. McGinty-Poteet added that while Asians and Hispanics make up a big chunk of California's population, these consumers are not "saturated" with investment sales campaigns. This means that competition for their investment dollars may be less intense than competition for other investors' money, she said.
*Marketing mutual funds to IRA customers. Currently, most IRA accounts at the company's bank subsidiaries hold only certificates of deposit.
*Selling the Pacific Horizon Funds through BankAmerica's private bank unit, which deals with the affluent. Ms. McGinty-Poteet acknowledged that the funds have not yet "really penetrated" this part of the bank's customer base. To sell more of them, she said the mutual fund unit will have to work more closely with the private bank.