Redmond, Washington is better known for being the hometown of Microsoft than for being a hotbed of fund management skills. Perhaps that won't change, but it won't be for lack of effort on the part of Safeco Funds. In fact, the fund firm is in the midst of shaking up its fund offerings.

That move comes as assets in the unit have slipped by nearly half to $2.7 billion today from $5.2 billion in 1998, according to Financial Research Corp.

To put things back on course, Safeco hired Kevin Rowell away from Alliance Capital last September to serve as president of the fund unit. Since then Rowell has focused on building up the funds' distribution, revamping its product line and strengthening its investment management bench.

The new look for its product lineup will debut in October. At that time it will rename seven of its existing funds, liquidate two others and close one to new investors. It will also introduce a co-management system on its funds and created a small-cap investment committee under the leadership of William Whitlow. Finally, it will reduce fees on seven of its funds.

"These changes enhance the investment process at Safeco Asset Management and are the first step in offering a fund lineup designed to help advisors meet their clients changing needs," said Rowell in a statement.

To sell the revamped lineup, Safeco has reportedly added eight wholesalers covering the broker-dealer channel in the past three months. Those hiring bring the total covering that channel to 18. All together the fund firm has 50 wholesalers.

On the fee front, Safeco is slimming the fees it levies on seven funds, including six fixed income or money market funds (U.S. Government Bond, California Tax-Free Income, High-Yield Bond, Tax-Free Money Market, Intermediate-Term Municipal Bond and Managed Bond) and one equity fund U.S. Growth Equity.

"We believe it is critical that our funds are fairly and competitively priced for our shareholders. We are committed to added risk control, an outstanding investment process and prudent expenses for all of our funds," explained Rowell.  

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