Insight May 2004 Monthly Update

“This issue of Insight updates a report called “Elephants lurk in the mutual funds jungle” that we published in February 2000. The big banks were then emerging as formidable competitors after years of having been dismissed as being too centralized, bureaucratic and stodgy for the fast-paced funds arena. Well, deposit-takers are now league leaders in manufacturing funds and running the money coming in. They held three of the top 10 spots in assets under management at the end of March 2004. RBC led the entire industry. CIBC placed third and TD was sixth. Four others—BMO, Scotiabank, National Bank and Desjardins—ranked among the top 20. To some extent, this growth reflects acquisitions. For example, CIBC absorbed Talvest, BMO bought GGOF, National Bank purchased Altamira, and Desjardins bought Northwest Mutual Funds. There were also gains as the banks prospectused some of their private client pools to access wider distribution. But much of the asset growth has in fact been organic. After years of frustrating false starts, bank employees are now better equipped to sell funds, and, judging from the data, their clients appear more willing to buy them.”