Banks' mutual funds underperformed the industry in terms of first-quarter asset and flow trends in equity, fixed-income, and money market portfolios, according to a report by Goldman Sachs' global investment research unit.
Mutual fund assets at banks fell 3.1% in the quarter, compared with a 0.7% decline for the industry. Banks' equity funds, after a "robust" 2004, have fallen 2.4% on average so far this year, compared with the industry's 0.5% drop, Goldman said. Fixed-income and money market performance by bank-owned funds continued a deterioration begun last year.
Northern Trust, up 4.5%; SunTrust, 3.6%; and Mellon's Dreyfus fund unit, 2.7%, all reported overall asset growth in the quarter, Goldman noted.
The New York investment banking company also said that, considering the concern about a flattening yield curve, banks like Comerica Inc. and Zions Bancorp. with a low concentration of mortgage assets and a high proportion of funding from core deposits, equity, and long-term debt would be better positioned.
