BOSTON -- The boom in U.S. mutual funds is grabbing the
attention of money managers who for years focused on running
for pension funds -- and doing quite well at it. At least three
money managers that oversee investments for schools, companies and
states are starting up mutual funds to sell to smaller customers.
BEA Associates, Rosenberg Institutional Equity Management and
Amerindo Investment Advisors Inc. are trying to cash in on one of
American's fastest-growing businesses. Mutual fund assets have more
than tripled to $3.3 trillion since the end of 1990.
"We all see where the growth in the business is going," said Paul
Stamler, director of fund product development at BEA Associates in
New York. "We've never really made an effort to make our investment
expertise available to individual investors. We are now. Mutual
funds are clearly the investment of choice."
Chancellor LGT Asset Management Inc., a New York-based firm with
$33 billion in assets that's owned by Liechtenstein Global Trust,
said it may join its compatriots by introducing its first mutual
funds next year.
Investors may find these new funds attractive. By and large,
pension fund managers have earned even better returns than mutual
funds have in recent years.
The Securities and Exchange Commission is aiding the sales efforts
of these new funds by allowing fund managers to include information
about their past performance managing private money in their mutual
fund prospectuses. This is no problem so long as the information
isn't presented in a "misleading way," said Robert Plaze, an
associate director in the SEC's investment management division.
In its prospectus for three funds, for instance, Rosenberg
Institutional says its Barr Rosenberg U.S. Small Capitalization Fund
rose at an annual rate of 21 percent in the five-year period ended
Sept. 30. That puts it ahead of almost 90 percent of all small-
company funds, according to statistics gathered by Morningstar Inc.,
a fund research group.
The bulk of the record was compiled before Rosenberg sold shares
in the fund to the public this summer, Morningstar said. Morningstar
already gives this fund its highest rating.
Similarly, the new Amerindo Technology Fund returned 34.2 percent
to investors on average in the past five years, according to the
Pensions Investments Performance Evaluation Report. This compares
with the average gain of 15.7 percent for small-company growth funds
in the same time, according to Morningstar. …