BURNHAM HAS BURN-‘EM-UP-FUND PLAN
Burnham Securities Inc., the New York investment firm founded by I.W.”Tubby” Burnham II, former chairman of Drexel Burnham…
Burnham Securities Inc., the New York investment firm founded by I.W.”Tubby” Burnham II, former chairman of Drexel Burnham Lambert Inc., is seeking approval from the Securities and Exchange Commission to launch four mutual funds.
Burnham seeks to debut a financial services fund, a money market fund, a small-cap value fund and a fund that will invest mainly in the 30 stocks tracked by the Dow Jones Industrial Average.
The firm, whose flagship is the Burnham Fund, is expanding offerings to bring in new clients and give established customers more choices. “Right now, if somebody sells their shares in the Burnham Fund, that money is gone,” says Jon Burnham, Burnham’s chief executive and son of the firm’s founder.
Building a mutual fund family from scratch won’t be easy. Industry giants such as Alliance and Fidelity are spending tens of millions of dollars a year to market their funds to brokers and financial planners.
And while the $160 million-asset Burnham Fund is well-regarded, its results haven’t been spectacular. The fund gained 22.1% last year–a result that beat the Lipper average for its peer group, but trailed Standard & Poor’s 500 stock index.
And Mr. Burnham admits the market has gotten more competitive. “We’re probably a little late in doing this,” he says. “But we want to get as much money managed under the Burnham name as we can, and I’m still convinced that we need a family of funds to do that.”
Mutual funds make up a small part of the firm’s $3 billion managed, mainly in private accounts.
New funds need all the oomph they can get to compete against more established players.
“The Putnams and the Oppenheimers of the world have wide coverage of the brokerage community,” says consultant Geoffrey Bobroff of East Greenwich, R.I., “and this can make it exceedingly difficult for a smaller organization such as Burnham.”
Crain News Service
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