The new owner of the Dreyfus funds, Mellon Bank, is trying to breathe life back into the weary Dreyfus lion. Early signs are encouraging.
The Dreyfus lion debuted in television advertisements in the 1950s, emerging from a subway and confidently lumbering down Wall Street to become one of the industry's most recognized trademarks. It was an apt image. Dreyfus was a pioneer in money-market funds and a whiz at marketing and customer service.As recently as the mid-1980s, Dreyfus was (after Fidelity) the second-largest fund company selling shares directly to investors. Unfortunately, many of the company's stock funds were weak.
Longtime chairman Howard Stein was bearish on stocks through most of the '80s and '90s, championing funds that would do well in bad markets rather than good. As a result, three of the six worst aggressive-growth funds since the start of the bull market in October 1990 bear the Dreyfus name.
Shareholders have voted with their checkbooks. Over the past five years, Dreyfus' share of all mutual fund assets has fallen from 5.1 percent to 2.7 percent.
Mellon has brought in Stephen Canter as the company's first ever chief investment officer. Publicly conceding that Dreyfus' stock funds needed fixing, Canter hired a slew of new managers and analysts and started 12 new funds.