Newspaper article THE JOURNAL RECORD

Securities Firms Lose Market Share to Traditionals

Newspaper article THE JOURNAL RECORD

Securities Firms Lose Market Share to Traditionals

Article excerpt

NEW YORK -- Merrill Lynch & Co. and Dean Witter Reynolds Inc. are capturing a smaller percentage of the cash flowing into stock and bond mutual funds as investors favor traditional fund companies such as Vanguard Group.

Merrill lost business relative to competing companies for a third straight year while Dean Witter saw its market share slip for a sixth consecutive year, according to Strategic Insight, a New York-based industry consulting and research group.

"The issue for all securities firms is that a disproportionate percentage of their business is in money market funds and bond funds rather than stock funds," said Avi Nachmany, an analyst at Strategic Insight. Securities firms also tend to manage the more conservative types of stock funds that aren't as popular these days as index funds and "aggressive growth" funds, Nachmany said. Vanguard is the largest manager of index funds. Merrill, the No. 1 U.S. securities firm, controlled 3.45 percent of the $2.5 trillion invested in equity and bond funds at the end of 1996. That's down from 3.72 percent in 1995 and down from a high of 4.26 percent in 1990, Strategic Insight reported. Dean Witter's share of stock and bond fund assets declined to 2.25 percent in 1996 from 2.5 percent in 1995, and fell from a high of 3.76 percent in 1990, according to Strategic Insight. Although the numbers of mutual funds is growing steadily, the industry is still concentrating. The combined market share of the top 10 fund groups increased to 50.17 percent last year from 48.91 in 1995, according to Strategic Insight. Merrill said its market share decline must be put in context. "To provide the best possible service to our clients, Merrill has adopted an approach that provides equal access to our funds and more than 2,000 outside mutual funds," said Susan Thomson, a Merrill spokeswoman. "The growth of proprietary fund assets must be viewed in the context of total growth in client in assets, which have increased dramatically and now approach $830 billion," Thomson said. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.