Qualivest Approaches 1996 Cautiously U.S. Bancorp’s Fund Group Watches For Signs Of Weakness

The managers of U.S. Bancorp’s Qualivest mutual fund group say they are approaching 1996 cautiously despite confidence about the nation’s economic fundamentals.

Qualivest’s nine funds will remain fully invested, said Tim Leach and Jeff Grubb, but they will watch for signs of weakness in such areas as technology and interest-related issues.

“There are some areas where the economy could slip,” said Leach, who is president and chief investment officer for Qualivest.

Grubb is senior vice president and manager of U.S. Bancorp’s Trust and Investment Management Division.

Qualivest has $6.8 billion under his management, of which $1.4 billion is in the mutual funds.

Most of the rest is in various institutional trust accounts.

The Portland-based company, which has offices in Spokane, Eugene and Seattle, is the largest manager of municipal bond funds in the Northwest.

The mutual funds were launched in August 1994 with about $550 million. Leach said the existing funds will soon be supplemented by four more, which will allow for asset allocation among the underlying funds.

He said the goal for 1995 had been a total mutual fund portfolio worth $1 billion, enough to create the economies of scale that trim management fees for investors.

With that level easily eclipsed, Grubb said the long-term plan is annual growth of 20 percent.

To reach that level, Leach said Qualivest will expand its marketing beyond U.S. Bank branches. The company is working with Charles Schwab & Co. Inc. to market its funds to registered investment advisers, he said, and may also approach investment advisers directly.

Selling through third-party brokers is a possibility, he added.

Grubb said the solid performance of Qualivest’s funds has been overlooked because most sales are in-house. More vendors will heighten Qualivest’s visibility, he said.

Although the association with U.S. Bank has been a net positive, Leach added, patrons can be put off by required disclosures that the Federal Deposit Insurance Corp. does not cover mutual funds sold in banks.

But the explanation, done properly, can also reinforce customer trust in their banker, he said.

Qualivest and the Composite Group of Funds administered by Washington Mutual Bank are the only Northwest-based mutual funds owned by banks.

Leach said the geographical presence nurtures a different approach to selling, and gives managers special insight into regional companies.

The fund portfolios may have slightly more Northwest stocks than other funds, he said, but there has been no decision to go forward with a fund that is specifically grounded on regional equities.

, DataTimes