The institutional money manager Fayez Sarofim & Co. will be picking stocks for one of two new funds with tax themes being rolled out with Dreyfus this month. The Mellon unit tapped the subadvisor for its new tax-managed balanced fund designed to help investors diversify. The second is a junk bond muni fund and is managed by Dreyfus staff.

"We believe that these funds address two critical needs for our customers," said Dreyfus Chairman and Chief Executive Officer Stephen E. Canter, alluding to recent volatility in the market and falling yields on municipal bonds.

Fayez Sarofim & Co. will act as the subadvisor for the Dreyfus Tax Managed Balanced Fund handling the equity portion of the fund while Dreyfus' Municipal Fixed Income Team led by Joseph P. Darcy and Scott Sprauer will manage the bond component of the portfolio.

This is not the first time Dreyfus has awarded a fund mandate to Fayez Sarofim & Co. as the firm already handles similar duties for the Dreyfus Appreciation, Dreyfus Premier Core Equity, Dreyfus Premier Tax-Managed Growth and Dreyfus Premier Worldwide Growth Funds.

Meanwhile, W. Michael Petty and James Welch will serve as co-managers for the Dreyfus High Yield Municipal Bond Fund.  

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