Magazine article American Banker

Banks Expect Fund Sales to Keep Zooming in '96

Magazine article American Banker

Banks Expect Fund Sales to Keep Zooming in '96

Article excerpt

Despite fears of a stock market correction, bank brokerage chiefs expect that this year's mutual fund sales will exceed last year's performance.

They are counting on a continued decline in interest rates, which they expect will help both the bond and stock markets.

Indeed, some suggested that sales of mutual funds at banks could reach the heights of 1993, when sales peaked at $29.5 billion, according to the Investment Company Institute. That's almost twice as much as sales in 1994.

"I'm banking on '96 to be my best year ever," said Dale Kaliszeski, president of the brokerage unit at First Commerce Corp., New Orleans.

With short-term interest rates moving downward, long-term bond funds are becoming more attractive relative to certificates of deposit, Mr. Kaliszeski said. And the stock market continues to climb every month.

Bank brokerages sprang back in the second half of 1995 after sales the previous year languished. In 1994, bank brokerages suffered as performances of bond and stock funds plummeted.

As an example, Mr. Kaliszeski said total revenues for his unit in 1995 were 16% higher than 1994, and "about the same" as in 1993.

The optimism of brokerage chiefs comes in the wake of a strong November for fund sales overall.

Net new sales in November were $14.1 billion, up 18.5% from October, according to the institute.

Data from the Washington-based mutual fund trade group reveal the increase was fueled mostly by stock fund sales, which captured $11.9 billion, up 21.4% from October. Net new bond fund sales remained flat at $2. …

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