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 |
|
Friday, May 25, 2001 Eaton Vance Has Kept the Chill Out Eaton Vance is building its marketing team and gaining inflows even as the rest of the fund industry is suffering a "belt tightening." The fund firm made the revelation in a quarterly conference call with analysts in which it revealed its second quarter operating results. Net sales at Eaton Vance grew from $1.6 billion to $1.8 billion from the first quarter to the second even as the fund industry in general lost sales, James Hawkes, chief executive officer, told analysts. The $3.4 billion in total sales for the first six months was double the year ago total of $1.7 billion, he added. Altogether, assets at the firm's more than 70 mutual funds grew to $49 billion from $44 billion a year ago. The firm saw $13 billion in new sales, $6 billion in outflows and $2 billion in asset depreciation, Hawkes explained. Hawkes credit the strong net flows to a "broadly-diversified" product line and singled out the firm's tax-managed funds as selling "very well." The firm had an outstanding year in performance in its Tax-Managed Growth and Tax-Managed Value funds, he said, noting that both funds had positive returns in a down-market year. He also said that fixed income funds, even the firm's muni-bond funds, are selling well. "We're really running on all cylinders here across our asset mix," he said. Despite the bright areas in new sales, Hawkes said the firm felt pain from the losses in its portfolio. He explained the lost $2 billion took $10 million of the firm's top line. "Unfortunately it also took $10 million of the bottom line, he added." In addition, the $13 billion increase in new sales created an proportionate increase in incentive compensation. William Steul, chief financial officer and treasurer, also said that marketing costs increased because of the increase in sales. Steul added that earnings were also affected by a change in how Eaton Vance pays broker-dealers. Distribution revenue increased 17 percent, faster than the firm-wide growth of 14 percent. This discrepancy reflects a change at Eaton Vance from paying the broker-dealer service fees in the first year on "A" and "B" share funds. It now pays the service fee directly to Eaton Vance Distributors, which pays that fee income to the broker-dealer beginning in the second year. The firm continues to add to staff, including on the marketing side, Hawkes reported. "That's not to say that we are not trying to manage the business carefully with attention to costs, but we do think we need to take advantage of our strong position and continue to gain market share. We are doing that," explained Hawkes. "We don't have a hiring freeze here, but it is a lot chillier than it was," quipped Steul later in the call. Printed from: MFWire.com/story.asp?s=26728 Copyright 2001, InvestmentWires, Inc. All Rights Reserved |