Magazine article American Banker

Boston Safe Deposit Plans to Offer Wilshire 5,000 Index Fund: Company Wants New Venture with California Consultants to Complement Computer-Based Management Services

Magazine article American Banker

Boston Safe Deposit Plans to Offer Wilshire 5,000 Index Fund: Company Wants New Venture with California Consultants to Complement Computer-Based Management Services

Article excerpt

NEW YORK -- Boston Safe Deposit & Trust Co. will become the first and only trust company to offer an index fund based on the Wilshire 5,000 Index, according to Gil Hammer, New York principal of Wilshire Associates.

Although bank officials have not yet signed the exclusive contract with Wilshire -- the Santa Monica-based consulting firm that developed the index and the software to construct a fund to match the performance of the index -- the deal is "85% to 95% completed," said Fred H. Settelmeyer, vice president. "We have a statement of agreement."

Boston Safe, a subsidiary of Shearson Lehman/American Express Inc., has a long history of offering its corporate clients quantitative and computer-based investment management services. But until now it has never offered an index fund to its corporate clients. "It's an area we are very interested in," said Mr. Settelmeyer.

In addition to the Wilshire 5,000 index, which is considered to be an "expanded index fund," the Boston trust company expects to offer a traditional index fund based on the Standard & Poor's 500 index. "We kind of see this as an opportunity to offer a family of index funds," said Mr. Settelmeyer.

Boston Safe and Wilshire will market the Wilshire 5,000 fund as a joint venture. Wilshire will actuall manage the fund, which will probably own between 800 and 1,200 securities picked to track the performance of the 5,000 stocks in the index. And Boston Safe will act as custodian.

Boston Safe and Wilshire officials have not yet decided on the fees they will charge customers. "It will be competitive with other index funds," said Mr. Settelmeyer. Additionally, officials of the trust company and Wilshire have not yet agreed on how the fee will be split between the two organizations, he added. New Commingled Fund

Boston Safe will create a commingled fund for clients wanting to invest in the index fund. …

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