KeyCorp is betting less will mean more.
The Cleveland-based bank is dropping management and operating fees it usually charges for its Key Stock Index Fund until the end of 1997. The strategy is designed to attract attention and about $80 million in new assets to the fund.
The index fund, which was created in July 1996, had $16.7 million under management as of Dec. 31, 1996, according to Financial Research Corp., Boston.
KeyCorp's executives want to draw attention to the young fund and the entire Key family of funds, a spokeswoman said. The fee waiver is part of an ambitious marketing push for the funds which began last year when the bank started two new no-load funds. It continues this year with three direct-mail campaigns.
"The popularity of index funds has increased dramatically among individual and institutional investors over the past few years," said W. Christopher Maxwell, chief executive officer of KeyCorp Mutual Fund Advisers, in a prepared statement. "By waiving fees associated with the Key Stock Index Fund, we are able to provide customers with a product they want at a lower overall cost."
The first of three mailings touting KeyCorp's KeyFunds and Victory Funds will go out this month, the spokeswoman said.
KeyCorp dropped the sales fees, known as loads, for its KeyFund family last year to attract the growing population of investors who prefer to make their own investing decisions. The bank acquired the KeyFund family when it bought the investment management firm Spears Benzak Salomon & Farrell Inc. in 1995.