Mutual fund companies are increasingly turning to subadvisers to manage some of their portfolios, according to a study done last year but not yet published by Financial Research Corp.

The study, to be released May 26, found that nearly one in nine funds is managed by a subadviser. These funds hold 9.1% of the assets under management in long-term mutual funds and get 20.3% of net new asset flow - or sales less redemptions and exchanges. That is up from 6.2% of assets under management and 7.5% of net asset flow in 1991.

Several banking companies are among the top subadvisers.

Deutsche Asset Management, a New York-based unit of Deutsche Bank AG, ranks second among subadvisers, with $36.7 billion of subadvised assets under management, according to the research firm. Mellon Financial Corp. of Pittsburgh ranks sixth with $12.9 billion. That does not include $2.1 billion of assets subadvised by Denver, Colo.-based Founders Asset Management LLC, which Mellon owns.

Wellington Management LLP of Boston, which subadvises on $100.3 billion of assets, ranked first.

The trend results from supply and demand, said Raymond Liberatore, an associate research director at the Boston-based consulting firm.

"Several institutional money managers have strong internal investment capability, but don't want to create a mutual fund and service it," Mr. Liberatore said.

At the same time, competitive pressures are forcing fund families to offer more complex portfolios, such as international funds. In such cases, it is usually less expensive to contract for fund management than to hire an investment manager, he said.

That is the reason that many banking companies outsource their mutual fund management.

SouthTrust Corp. of Birmingham, Ala., is considering adding an international fund to its fund family. If it does, it will hire a subadviser, said Richard S. White, executive vice president of SouthTrust's capital management group.

"A lot of banks our size don't have the capability to do an international fund" in house, Mr. White said.

Often, banking companies find that outside managers can do a better job in certain areas.

"We've clearly got a talented group of investment managers, but we do have a value bias," said William G. Papesh, the president of WM Advisors Inc., the asset management arm of Seattle-based Washington Mutual Inc.

Washington Mutual contracts for management of two equity funds - growth and international portfolios - and four bond funds. Washington Mutual had managed one of the bond funds internally, but outsourced it in order to get better results.

"Experience has shown that it's better to focus on what you do," Mr. Papesh said. "It's more profitable for the bank to do it internally, but we've got to have a competitive advantage."

The Financial Research study looked at more than 6,700 open-end mutual funds, with $6 trillion of assets under management.

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