When it comes to managing mutual funds for retail customers, Wells Fargo & Co. is the banking industry's undisputed champ.
The San Francisco-based bank had $7 billion of retail fund assets under management as of June 30 -- 44% more than its nearest competitor, according to a ranking prepared for the American Banker by Lipper Analytical Services.
In second place was NBD Bancorp, Detroit, with $4.9 billion in retail fund assets. J.P. Morgan & Co. ranked third, with $4.2 billion.
$88 Billion of Assets
In all, 94 banks managed $88.3 billion in retail fund assets at midyear, up41% form a year earlier, according to the Lipper ranking.
On Wednesday, the American Banker published a ranking based on bank's combined retail and institutional fund assets. The accompanying chart spotlights the top 25 banks in retail funds, and provides totals for all 94 banks with retail funds.
Lipper tracks 103 banks that have proprietary mutual funds, but nine offer the investments only to institutional customers, such as pension plans, corporations, and trusts.
Consumer Funds Grow
Most banks funds for individual investors are of recent vintage. In the past, banks in the fund business concentrated on institutional clients.
Banks have been rolling out new retail funds because, in the face of low interest rates, consumers are demanding alternatives to deposits.
Consumers view banks as a convenient place to invest, and often feel an affinity for their financial institutions, said Geoff Bobroff, a senior vice president of Lipper.
Banks also have a practical edge, he said. "A bank customer is probably less inclined to wander into a traditional brokerage firm."
|Light in Equities'
Banks' retail fund assets were heavily tilted toward money-market funds, which hold $49.2 billion, or 56% of the total. In contrast, 30% of the mutual fund industry's total $1.8 trillion of assets is in money-market funds.
Equity funds were the second largest category, with $16.8 billion of assets. While equity funds equal 19% of bank retail fund assets, they are shy of the industry average of 32%.
"Banks are light in equities," said David B. Dyche, director of financial industries at Arthur D. Little Inc., New York. "But I think that's probably the nature of the bank client."
Robust Growth the Rule
Taxable fixed-income funds held $14.4 billion, or 16% of retail assets, and tax-exempt fixed income funds held $7.9 billion, or 9% of retail assets.
Only one bank -- BankAmerica Corp. -- ranks in the top 10 in both institutional and retail assets. (Rankings of banks by institutional assets will appear Friday.)
Twenty-four of the top 25 banks in the retail fund business boosted their assets during the 12 months that ended June 30. The sole exception was Mellon Bank Corp., ranked No. 23, which saw its retail assets decline from $1.7 billion to $1.3 billion.
Among the leaders, Wells Fargo's retail fund assets climbed by 82% in the 12 months, from $3.9 billion at midyear 1992, and NBD's retail assets rose 61% from $3 billion.
But while robust growth was the rule, it wasn't universal. J.P. Morgan, for instance, boosted its retail assets only 1.6% during the 12 months.