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FleetBoston, United Overseas Swap Funds

FleetBoston of Boston and United Overseas Bank of Singapore have agreed to sell each other's funds in their respective markets.

Fleet Investment Management, a unit of FleetBoston, will sell one of United Overseas Bank's Pan-Asia equity funds as part of Fleet's Galaxy Fund family, while United Overseas Bank will distribute one of Fleet's Pan-American equity funds through its United Fund family.

"The commoditization of mutual funds in the U.S." has made the introduction of new funds challenging and prompted Fleet to make this arrangement with a Singapore bank, said Robert Ash, senior managing director and chief executive officer of Fleet Investment Management. The United Overseas Bank is the second-largest bank in Singapore, Ash said.

"It's out-of-the-box thinking," said Ash, who added that he had not heard of other U.S. mutual fund companies making isolated swaps of funds with foreign companies.

United Overseas Bank has swapped funds with or served as the subadvisor to 10 other fund companies in Europe and Japan, said David Goss, managing director of United Overseas Bank Capital LLC of New York, the asset management division of the bank outside of Asia.

In the past three years, United Overseas Bank has methodically formed partnerships with other fund companies as a safe way of entering a new market, Goss said.

United Overseas Bank views such arrangements as preferable to full-blown acquisitions, joint ventures or starting from the ground up in a foreign market because they are easy to get into, easy to get out of and can be expanded, Goss said.