Capital Network Services, a San Francisco mutual fund service provider, has unveiled a Web-based fund supermarket for investors looking to trade in and out of money market funds quickly.
Capital Network is the first company to offer an Internet supermarket that consists solely of money market funds, said its president and chairwoman, Kathryn Heily. It has distribution agreements with about 40 fund families, including Mellon Bank Corp.'s Dreyfus Corp. fund family, Putnam Investments, Federated Investors, and J.P. Morgan & Co.
The Web site, which was rolled out last month, targets institutional investors such as banks and municipalities, as well as high-net-worth investors. Previously, Capital Network offered the services via telephone.
Though the company does not offer investment advice, it gives on-line access to more than 300 money market funds. Elie M. Genadry, president of Capital Network's brokerage and a former Dreyfus executive, said this averts the "operational nightmare" of dealing with multiple fund families and statements.
Clients are not charged transaction fees to buy funds. Instead, the fund families pay Capital Network a cut of 5 to 80 basis points of assets under management, Mr. Genadry said.
Money market funds have long been used by banks to move huge amounts of cash to meet Federal Reserve requirements. Capital Network's Web site will probably appeal to mid- and large-tier banks, said Wesley W. Sturges, president and chief executive of First Commerce Bank of Charlotte, N.C. First Commerce, which is just shy of $100 million in assets, has most of that in loans and investments, he said. Capital Network is "probably not something we'd be interested in," he added.
Ms. Heily said she could not pinpoint how many of Capital Network's 27,000 clients use the Web-based supermarket.
Nonetheless, she said, offering the company's services through the Web will boost business significantly.