Kemper Funds is trying to drum up more business from bank trust departments, starting with the few dozen that already use its products.
Kemper is a Chicago unit of Scudder Kemper Investments Inc. that sells mutual funds through intermediaries. In addition to those it sells through bank brokerages - about $1 billion in 1999 - in the past few years it has sold funds through bank trust departments at net asset value.
More recently - about two-and-a-half years ago - Kemper began offering its funds on Federated Investors' TrustConnect and Sungard Investment Systems' Expediter, which provide clearing and settlement for bank trust departments trading various mutual funds.
Now it is asking banks that sell its funds through TrustConnect and Expediter what they like about the funds and how it can help them sell more, said Gary Kocher, director of Kemper Funds' financial institutions division.
The company is also exploring whether to hire additional wholesalers to cover trust departments or have its 14 field wholesalers who focus on bank brokerages start seeking trust business too.
Many fund companies have been trying to expand sales through new channels. Among them is Kemper Funds' sister company Scudder Funds, which so far has sold only directly to investors. Last month Scudder said it would create front-end, back-end, and level-load share classes on three funds to be sold through intermediaries. Kemper Funds' push for trust-department business exemplifies a widespread shift in the industry from commissions to fee-based services.
Mr. Kocher acknowledged that the unit faces strong competitors in the bank trust department market - among them such-long-established competitors as Federated Investors, SEI Investments Inc., American Century Investments Inc., and Aim Management Group of Houston.
One advantage for Kemper, Mr. Kocher said, is its expertise in global asset management. Kemper has 12 international funds, with $2.1 billion of assets under management, according to Morningstar Inc. of Chicago. One of those funds, the Kemper Global Discovery Fund, had an annualized return of 28.87% over the past five years and ranked in the top 10% of global stock funds by that measure, said Russ Kinnel, editor of Morningstar.com.
Even if the trust department effort takes off, Mr. Kocher said, Kemper will continue to focus on bank brokerages. Kemper plans to continue to add to its fund line-up within the next few months, he said. He declined to elaborate.
The company's funds had about $53 billion of assets under management on Feb. 29.