acquisitions, First Union Corp. has begun introducing new products. This month the Charlotte, N.C.-based banking giant launched the Evergreen Systematic Investment Program, a plan that allows people to invest as little as $50 a month in mutual funds. And in the coming months, the bank also plans to unveil a variable annuity and several new mutual fund portfolios. The flurry of new offerings follows a period in which First Union devoted time to consolidating mutual fund operations after its acquisition of the Evergreen and ABT funds. "We purposely did not come out with a lot of products in 1995, because we wanted a real clarity of focus on our business, and I think we have that now," said William M. Ennis 2d, senior vice president of First Union's mutual fund unit, Evergreen Asset Management. In the same vein, chairman Edward E. Crutchfield Jr. said in a recent interview that First Union was bowing out of bank acquisitions for a while and would instead concentrate on internal growth and its planned merger with First Fidelity Bancorp. later this year. With the bank's new Systematic Investment Program, investors select a fixed amount of money that can be invested in 11 Evergreen portfolios on a semimonthly, monthly, or quarterly basis. Mr. Ennis said he hopes to have 120,000 of these accounts by the end of the first quarter. "What we're taking is a long-term view with our relationships with customers," Mr. Ennis said. "So far we've been bombarded with calls and requests for this product from our branch network." But because the amounts invested by consumers may be small, often reaching no more than $1,000, some industry observers have said it could end up being an expensive approach to garnering assets. "When you consider that a statement has to be sent out for every transaction a customer makes, the cost of maintaining these accounts can be astronomical," said Geoffrey Bobroff, a mutual fund consultant in East Greenwich, R.I. Mr. Ennis said that the costs would be managed by limiting the number of mutual fund portfolios available under the plan to those that have already reached a level of profitability - $1 billion or more. On March 1, First Union will roll out the Evergreen Variable Annuity. The annuity will include portfolios from Evergreen and Fidelity Investments, and will be underwritten by Nationwide Financial Institutions Distributor Agency Inc. First Union has also been working on integrating its investment product offerings with those of First Fidelity, should the merger be approved by regulators. Mr. Ennis said First Union is rolling out its systematic investment accounts in First Fidelity branches this month. In addition, a mutual fund asset allocation product that would comprise Evergreen and FFB funds is also in the works, he said. The banking company is looking at ways to promote its money market mutual funds for use in retail sweep accounts, where people can stash excess cash from their checking accounts. The Evergreen Global Fund will add a class of retail shares early next year, Mr. Ennis added. And the bank has plans to launch a high-yield bond fund utilizing a master-feeder mutual fund structure sometime in 1996.
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