Eighteen months after jumping into the mutual fund game, Sun Trust Banks has set its sights on the big leagues.
The Atlanta-based banking company is planning a dramatic expansion in the coming year as it strives to strengthen its grip on the lucrative investment-management business.
A top bank executive said the mutual fund business is growing so steadily that there is plenty of room for Sun Trust to compete for market share with traditional fund companies and other banks.
"We're in the fourth inning of a nine-inning game," said John Race, executive vice president at SunBank Capital Management, Orlando.
Spotlight on Fund Family
The management company, a unit of SunTrust's Orlando-based SunBank subsidiary, shares mutual fund oversight duties with a sister company, Trustco Capital Management, Atlanta.
Right now, Suntrust is shining the spotlight on its retail offerings, a family of nine funds marketed under the STI Classic name.
The bank is aggressively promoting the funds in North Florida in an advertising campaign that includes television, radio, and print ads.
SunTrust plans to follow the media blitz by introducing six new fund portfolios on Jan. 1. And by the middle of next year, the fund family will expand further, with the addition of some international funds.
The activity is meant to put wind in the sails of a mutual fund business that has already seen considerable growth.
Institutional and retail fund assets jumped to $3.7 billion as of Sept. 30, more than double the $1.6 billion level of one year earlier, according to a ranking prepared for the American Banker by Lipper Analytical Servicer, Summit, N.J.
In the North Florida advertising campaign, SunBank is putting the focus on investors' worries about protecting their income and retirement savings against higher taxes, among other things.
One television spot for tax-free bond funds features a senior citizen who invokes the adage "Uncle Sam wants you" - and turns it on its ear. "It's not you and me he wants," the actor says. "He wants our money."
The print advertising campaign is running in newspapers in key Florida markets, including the Orlando Sentinel, and in regional editions of the Wall Street Journal and BusinessWeek.
SunTrust executives declined to disclose the cost of the advertising campaign, which is running from through Dec. 1.
But the campaign, which was developed by Tucker Wayne/ Luckie & Co., Atlanta, is showing results, the executives said.
SunTrust telemarketing centers, staffed with 20 securities salespeople, are fielding 200 calls a day as a result of the campaign, said executive vice president John McGuire.
SunTrust especially wants customers to keep the bank in mind on the eve of major expansion for the STI funds.
On Jan. 1, six new funds - three single-state tax-exempt portfolios, two equity funds, and a balanced fund - will be added to the lineup.
SunTrust is also considering hiring experienced portfolio managers as it branches into managing international funds, Mr. Race said. But the bank hasn't ruled out growth by acquiring a fund company, he said.
Adding to Sales Force
Right now, SunTrust has 80 representatives selling STI funds and other mutual funds from 360 branches.
Salespeople will probably be added to help market the expanded offerings.
"We find we're not even scratching the surface of our existing customer base," Mr. Race said.