BEA Associates, a New York-based investment manager, is mapping out a strategy to pitch a set of no-load international mutual funds to banks.
The company, an arm of Zurich-based Credit Suisse, hasn't signed on any clients yet, but it has plans to hawk the new products to bank trust departments and bank mutual fund supermarkets.
"The feedback we're getting from banks is that they see opportunity to diversify customers' portfolios with international funds," said Paul P. Stamler, vice president, product development.
Traditionally conservative, banks have only just begun to sell domestic stock funds, let alone international portfolios. Still, bank trust officers - if not bank retail brokers - are starting to add international funds to their menus, consultants say.
The new portfolios BEA is pitching are BEA International Equity Fund, BEA Emerging Markets Equity Fund, and BEA Telecommunications Fund. The company has also created the BEA High Yield Fund, a domestic bond fund that it plans to sell to banks.
The international funds are fairly aggressive and invest in small countries. With the telecommunications portfolio, BEA is seeking stocks of a single sector.
Such funds are "on the fringe" and do not yet appeal to bank customers on the retail side; but "BEA has a good shot" to become a player in trust departments, said Geoffrey Bobroff, a mutual fund consultant in East Greenwich, R.I.
Mr. Bobroff said few fund companies have "staked out a significant claim" in the international funds arena. Franklin Resources Inc., Putnam Investments, and T. Rowe Price are the only companies to gather significant market share selling international funds, he said.
BEA, which manages $31 billion in pension plans, private accounts, and closed-end mutual funds, has other plans for banks, too. The company is soliciting bank-managed mutual funds, hoping to get jobs subadvising their portfolios.
BEA isn't putting all of its eggs in the bank basket though. The company is also selling its funds through financial advisers, stock brokers, and insurance companies.
Mr. Stamler acknowledges that bank sales of mutual funds have not kept pace with other financial intermediaries, but he insists the marketplace holds opportunity.
"Banks have realized they've been lagging, and they have been taking positive steps," he said.
Mr. Stamler cites as examples the development of mutual fund supermarkets at banks where he hopes to carve out shelf space. NationsBank Corp. and Barnett Banks Inc. are the only two banks to have created such programs, but others are reportedly considering their own versions.