NU Online News Service, Dec. 16, 2003, 5:43 p.m. EST – Bank sales of long-term mutual funds increased in October for the first time in 5 months but were still 11% below year-earlier levels, according to a monthly survey by Kenneth Kehrer Associates, Princeton, N.J.[@@]
Banks sold $2.4 billion worth of mutual funds in October, which is down from $2.7 billion in October 2002 but up 8% from $2.2 billion in September 2003, according to the survey, which is sponsored by Invest Financial Corp., Tampa, Fla.
Bank fund sales have been in a slump. But October sales were up 26% from a recent low of $1.9 billion hit in December 2002, says Invest President Lynn Niedermeier.
Kenneth Kehrer, whose firm conducts the monthly survey, notes that mutual fund sales in banks, savings institutions and credit unions plunged during the second half of 2002 but improved considerably during the first 5 months of 2003.
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“However, due to the summer sales slump, bank mutual fund sales were still 25% below the May peak,” Kehrer says.
Niedermeier compares the October figures with data from the Investment Company Institute, Washington, which show that overall U.S. sales of long-term mutual funds were 8.8% higher in October than in September. However, ICI figures also show that, year-to-date, overall U.S. mutual fund sales were 3.3% lower than overall sales for the comparable period in 2002. At banks, year-to-date fund sales were down 17%.
“People who invest where they bank tend to be conservative,” says Kenneth Kehrer, head of the research firm that conducted the study.