Magazine article American Banker

Fund Distributor Aims to Boost Its Wrap Sales

Magazine article American Banker

Fund Distributor Aims to Boost Its Wrap Sales

Article excerpt

The parent company of several mutual fund families has formed a new distribution unit to market its products to investors through wrap programs.

CDC Ixis Asset Management North America, the Boston parent of such fund families as Oakmark Funds and Loomis, Sayles & Co., has created CDC Asset Management Intermediary Services. The unit combines the marketing and strategy elements of the company's three previously separate distribution arms, said Douglas DuMond, president of the new unit.

In creating the new unit, the company hopes to improve sales of its 14 no-load fund families, and add roughly $1.8 billion this year in new flows to its books, up from $1.2 billion last year, Mr. DuMond said. Despite this, the company does not anticipate widespread growth in sales through banks.

The asset manager, a subsidiary of the Paris-based bank CDC Ixis, is anticipating the day when banks develop mutual fund wrap accounts in the same way as their competitors at brokerages and insurance companies, said Hugh Kelly, senior vice president of the new unit.

Mr. Kelly said that in forgoing commission loads in favor of wrap programs, the company is positioning itself to ride a growing trend.

By way of evidence, Mr. Kelly cited a report by Strategic Insight, a New York fund consulting group, which showed that investors opened more than 400,000 new mutual fund wrap accounts in 2000, up more than 50% from the year before. Avi Nachmany, director of research at Strategic Insight, said that these types of accounts -- both old and new -- saw inflows of $50 billion, also double the previous year.

But for now, the company is focusing most of its marketing efforts on broker-dealers, retirement plans, and financial planners since very few banks have established viable wrap account programs, Mr. Kelly said. …

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