ING Pilgrim Funds of Scottsdale, Ariz. has filed a preliminary proxy with the Securities and Exchange Commission seeking to replace J.P. Morgan of New York as the sub-advisor to its Pilgrim Research Enhanced Index Fund with Aeltus Investment Management of Hartford, Conn., an affiliated company, according to the proxy.

Both Aeltus and ING Pilgrim are subsidiaries of ING Groep of Amesterdam, the Netherlands.

In proposing Aeltus as the new sub-advisor, the fund's board of trustees considered the investment manager's recommendation that it hire Aeltus and other factors including past performance of similar funds managed by Aeltus, services and depth of resources provided by Aeltus, and the firm's investment methodology, according to the proxy. In addition, the board considered the fact that there would be no increase in fees associated with the change in managers, according to the proxy.

The Pilgrim Research Enhanced Index Fund's performance appears to have been a factor in the board's decision to fire J.P. Morgan. The proxy statement compares the fund's performance with that of two other enhanced index funds managed by Aeltus and the fund's benchmark index, the S&P 500. The data shows the Pilgrim Enhanced Index Fund trailed the S&P 500 significantly since 1999 while the two other funds managed by Aeltus outperformed the S&P in 1998 and 1999, but slightly trailed the index last year, according to the proxy.

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