Magazine article American Banker

Federated Adds 5 Overseas Funds in Bid to Bring Banks on Board

Magazine article American Banker

Federated Adds 5 Overseas Funds in Bid to Bring Banks on Board

Article excerpt

Banks looking to spice up their mutual fund offerings with some specialized international portfolios now have a few more choices, courtesy of Federated Investors Inc.

Though mutual fund investors have warmed to overseas investing in recent years, many banks and their customers have been slow to join the party.

Federated's challenge is to convince bankers that its five new international specialty funds, including emerging markets and small company offerings, and four revamped older international funds are the way to go.

"People can't turn their backs on international investing anymore," said Henry A. Frantzen, executive vice president and head of Federated Global Research Corp. which manages the funds. "The international markets are ripe to grow."

The Pittsburgh-based mutual fund giant has bet big on overseas investing. Last spring, the company established a unit in New York to manage money internationally. Federated is counting on its existing bank relationships and high-powered portfolio management to win new business.

By yearend, Federated expects to double the $500 million in international assets it currently manages through sales in equal measure to bank trust and retail brokerage units, a company executive said.

But Federated may find it tough to sell volatile niche products such as its Latin American fund, even as diversification tools.

"They're going to have to show me how that level of asset allocation makes a measurable difference in a client's portfolio," said Alan W. …

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