NU Online News Service, Nov. 14, 2003, 1:13 p.m. EST – Bank sales of long-term mutual funds fell to $2.2 billion in September, down 15% from the total for September 2002, according to survey results from Kenneth Kehrer Associates, Princeton, N.J.
September’s total was 31% below this year’s high of $3.2 billion, achieved in May.
However, fund sales in banks stabilized in September after falling for three straight months, according to a report on the monthly survey, which is sponsored by Invest Financial Corp., Tampa, Fla.
“Bank mutual fund sales increased for five consecutive months between December and May, when they reached a 12-month high,” says Lynn Niedermeier, president of Invest. “Despite the declines in recent sales activity, August and September levels were still 16% above the December trough.”
Kenneth Kehrer, whose firm conducts the survey, says bank mutual fund sales fell during the second half of 2002 but appeared to have turned around during the first five months of 2003.
Kehrer warns that mutual fund sales may take a further hit from recent charges of fraud against mutual funds. The Securities and Exchange commission and some state officials have charged some funds, including Putnam Investment Management Inc., Boston, with, among other things, favoring a few select investors over smaller clients.
Fund sales in banks “might show a decline in October, particularly since Putnam has been historically the best-selling fund in banks,” says Kehrer. “Whether people are taking their money out of Putnam or pulling out of funds altogether remains to be seen.”