MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication
an InvestmentWires' Publication
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MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication |
|
Monday, April 26, 2004 BofA Fund Group Struggles for Identity Analysts and investors view the funds offered by the merged Bank of America and FleetBoston group as largely lackluster and duplicative, reported Andrew Caffrey of the Boston Globe on Sunday. Bank of America and FleetBoston announced merger plans in October of last year, and finalized the merger on April 1. Caffrey concluded that the funds have a "handful of star performers among a mediocre lineup, and confusing arrays of offerings in need of serious weeding." Together the combined entity manages $260 billion in assets and offers over 500 funds in all share classes. $117 billion is in long-term, non-money market mutual funds, said Charles Salmans, spokesman for Columbia Asset Management. Among the concerns that investors have about the funds are worries that the employees at the funds will spend more time jockeying for position post-merger instead of doing their jobs. "When there is a merger and acquisition, people are going to be looking out for their jobs, rather than managing money" Salmans reported Wes Bigler as saying. Bigler, president of Atlanta-based Financial Network Investment Corp., has withdrawn most of his clients' stake in Columbia funds. Additionally, Columbia and Nations Funds' Morningstar ratings compare poorly to peers. 28 percent of Columbia funds and 32 percent of Nations' funds are rated four or five stars, compared to 70 percent of Vanguard Group's, 48 percent of American Funds, and 41 percent of Fidelity's funds. Nations and Columbia are doing a few things right, reported Caffrey. The funds have managed to net new cash, which cannot be said of other SEC targets Putnam, Alliance, Janus and MFS. Nations has also been successful with their international funds and Columbia with fixed income products. Salmans did not comment on integration plans, but said that Columbia's integration with the Liberty funds group in 2001 took one year -- six months spent planning and six months getting the necessary approvals. The scale of that merger was approximately $50 billion in total managed assets, compared to the combined $117 billion in Columbia and Nations' long-term, non-money market mutual funds. Most of the disclosures for Columbia's deal with Liberty were included in SEC filings, said Salmans. The firms are unlikely to make announcements anytime soon, Salmans added. Bank of America and FleetBoston settled with the SEC jointly in March, agreeing to pay out a combined $675 million in penalties over market timing charges. The settlement also called for eight of BofA's Nations Funds board members to step down by May 1, 2005, a measure that is being challenged by the directors. Keith Banks replaced Robert Gordon in December 2003 as president of BofA's asset management group. Banks was chief executive officer of FleetBoston's asset management unit, Columbia Asset Management. Printed from: MFWire.com/story.asp?s=7079 Copyright 2004, InvestmentWires, Inc. All Rights Reserved |