Survey Finds Banks Losing Deposits to Mutual Funds

GREENWICH, Conn. - Mutual funds are attracting older, more conservative investors who are transferring assets from bank certificates of deposit, insurance company annuities, and fixed-income investments, according to a survey of stockbrokers.

Sixty-eight of 100 brokers polled by Greenwich-based National Securities and Research Corp. said the number of mutual fund investors had increased, especially among middle-of-the-road investors who previously did not own mutual funds.

Shift in Risk Perception

Mutual fund investors typically have been "risk-taking stock and bond investors," said National Securities and Research, which manages $2 billion in assets.

The company said 90% of the brokers it surveyed reported that they have seen more conservative investors moving assets from bank CDs to mutual funds. Nearly 50% said clients had transferred funds from insurers' variable annuities and guaranteed investment contracts to mutual funds.

Age Group Has Shifted

"Brokers noticed a much higher age bracket among mutual fund investors," said Robert Adler, president of NSR Distributors, the sales arm for the NSR mutual funds.

"Older investors are looking for safer havens for their capital, and they are concerned about the security and integrity of banks and insurance companies," Mr. Adler said.

The survey also said the most popular types of funds attracting first-time mutual fund investors are conservatively managed balanced funds and income funds with higher yields.

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