Deep pockets and a global brand aren't guarantors of success in the U.S. mutual fund business. A case in point is DWS [profile]. In yesterday's "Fund Times" column, Morningstar overviews the creation and suffering of DWS over the past decade or so. Potential bidders for the U.S. DWS business may not be encouraged by Morningstar's take. MStar doesn't find an impending DWS sale surprising, but nor does the ratings firm find it heartening, either.

Deutsche Bank publicly confirmed last week that it is "conducting a strategic review of its global asset management division," including the U.S. fund business but excluding DWS in Europe and Asia [see MFWire.com, 11/22/2011].

The Morningstar overview includes mention of Deutsche Bank's purchase of Scudder in 2002, the market-timing scandal in 2003, and the $682 million in quarterly net outflows DWS has averaged ever since that scandal.

Morningstar expects any DWS sale would result in "major changes in their funds," possibly even a sale of different pieces, like insurance. The Chitown firm worries that such a split could cut the DWS funds off from some resources and concludes by noting that "such uncertainty may provide incentive for investors to go elsewhere." 

Edited by: Neil Anderson, Managing Editor


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