CDC IXIS playing the name game

Necessity may be the mother of invention, but name recognition is the mother of reinvention.

At least that seems to be the case for CDC IXIS Asset Management North America LP, which has changed the names of eight mutual funds to reflect the names of the asset managers behind them.

In the process, the Boston-based company, which oversees 11 money managers, is removing – or has removed – its own name from all but a handful of its funds.

emphasis on fund managers

“The overall idea is to emphasize the underlying fund managers and make it simpler for brokers,” says Peter Joyce, vice president of corporate communications for CDC, formerly known as Nvest LP.

“The individual names certainly carry a lot of brand recognition,” says Mr. Joyce.

CDC IXIS, the money management arm of French financial services company Groupe Caisse des Dep”ts, needs all the brand recognition it can get.

Saddled with a low profile, CDC IXIS bled $268 million in stock and bond fund assets during the first six months of the year, compared with outflows of $253 million over the comparable period last year, according to Financial Research Corp. in Boston.

Meanwhile, its share of the wholesale channel had dipped to 0.23% at the end of this June, from 0.24% at the end of March, FRC says. Mr. Joyce declines to comment on the company’s net outflows.

But one obvious problem is size. With a mere $4.2 billion in stock and bond funds, CDC IXIS is a guppy in a tank filled with sharks and barracuda.

Another problem is performance. With the exception of Boston-based Loomis Sayles & Co. LP, one of the industry’s better-known bond shops, and Chicago’s Harris Associates LP, a well-regarded value shop, CDC IXIS’ menu of affiliates is rather lackluster, say industry observers.

no flagship product

CDC IXIS’ mutual funds produced asset-weighted investment losses of 15.7% in 2002.

By comparison, the asset-weighted losses of the funds’ respective categories averaged 15.6%, according to Morningstar Inc. in Chicago.

Asset-weighted returns emphasize the results of individual funds in proportion to the amount of money each invests.

On a scale of one to five, Morningstar gives CDC IXIS a 2.7 for its ability to manage U.S. stock assets, which account for about 65% of its fund assets.

“Maybe this is an acknowledgement of the fact that there isn’t a sort of flagship in their stable,” Jeffrey Ptak, a mutual fund analyst at Morningstar, says of the name changes.

“Therefore, it makes sense for them to try to leverage the brand equity already associated with some of their funds,” Mr. Ptak explains.

The eight funds have been renamed as follows: CDC Nvest AEW Real Estate Fund is now AEW Real Estate Fund, CDC Nvest Capital Growth Fund is now Westpeak Capital Growth Fund, CDC Nvest Bond Income Fund is now Loomis Sayles Core Plus Bond Fund, CDC Nvest Government Securities Fund is now Loomis Sayles Government Securities Fund and CDC Nvest Growth and Income Fund is now Harris Associates Growth and Income Fund.

Also, CDC Nvest Massachusetts Tax Free Income Fund is now Loomis Sayles Massachusetts Tax Free Income Fund, CDC Nvest Select Fund is now Harris Associates Focused Value Fund, and CDC Nvest Targeted Equity Fund is now CGM Advisor Targeted Equity Fund.

a rose by any other name

The only funds keeping the “CDC Nvest” moniker are the company’s “Star” funds – those that invest in funds offered by the affiliates.

“It’s important to remember that these funds are changing in name only,” Mr. Joyce says. “The managers are not changing.”

In addition, CDC IXIS has launched four new funds through Loomis Sayles, arguably its best-known affiliate.

They are the Loomis Sayles International Equity, Loomis Sayles Growth, Loomis Sayles Investment Grade Bond and Loomis Sayles Research funds.

The new funds bring to 23 the total number of mutual funds offered by CDC IXIS.