After half a year of watching investors take their money elsewhere, some bank fund managers are downplaying their ties to their banking company parents.

Others are simply marketing harder.

Robert L. Ash of Fleet Investment Management is in the first category. "You can't sell just to bank customers," he said.

Mr. Ash, the senior managing director and chief executive officer of the FleetBoston Financial Corp., also said banks need to pursue longer-term shareholders and beef up service so clients will not flee if performance turns temporarily bad.

In the other category is Summit Financial Services. The Summit Bancorp unit is weighing a new branding campaign emphasizing the safety of putting money with a large financial institution.

Banks are reeling after a period of stock market volatility that led to spectacular rates of attrition for some of their funds.

First Union Corp.'s Evergreen equity and fixed-income funds generated $1.4 billion of redemptions in the first half, according to Financial Research Corp. Summit, of Princeton, N.J., sustained a $32.6 million decline in its fund unit's equity and income funds, while SunTrust Banks in Atlanta lost $899.4 million in its stock and bond funds, Financial Research said.

Bankers must adopt a more aggressive mindset to stem the tide, Mr. Ash said. His prescription to protect banks' customer bases from nonbank competitors: Let mutual fund arms act more independently.

Many bank funds see their duty as simply managing more assets for their depositors, rather than trying to capture new assets from outside the bank, Mr. Ash said. That attitude, he said, means a limited market - and less-than-loyal customers.

The perception that banks have done worse than average may be exaggerated. First Union's loss in equity and bond funds, for example, has been more than offset by inflows into Evergreen's money market funds, a spokesman for the company said. Taking that into account, Evergreen had net first-half inflows of $2.63 billion, the spokesman said. SunTrust did not reply to a request for comment.

R. Gregory Knopf, a principal at HighMark Funds, a unit of Unionbancal Corp., said that bank-managed funds suffer from the perception that they are poorly managed, but in many categories they perform just as well as other mutual funds

Mr. Ash said that outside of the technology sector - which many banks were late to enter - the average bank income or index fund is essentially on par with similar funds in performance.

Mark Beeson, head of funds at Bank One Investments, said banks also run equity funds well enough that in any given year a number of them will be among the top 10 or 20 in performance.

Some bank-run funds are having an exceptional year, whether in performance or in attracting new money. Firstar's Stellar Science and Technology Fund, for example, has gained 10.67% since the start of the year, while most other technology-focused funds are in negative territory.

But Mr. Ash said the standout performers among bank-managed funds are often those that run independently from the bank.

Dreyfus, which is owned by Mellon Financial Corp., and Black Rock Investment Advisers, owned by PNC Financial Services Group Inc., have performed well and managed to attract significant new investment capital, Mr. Ash said. These companies have an advantage, because they operate independently of their bank owners and are perceived as separate entities, he said.

Dreyfus' first-half inflows increased 11.8% from last year, to $921.4 million, according to Financial Research. Black Rock brought in $572.6 million in the first half, while Fleet has had net outflows of $467.8 million.

Banks also face a challenge in convincing shareholders to keep their money in the fund for longer periods of time, Mr. Ash said. Fleet customers stay with the funds for an average of 11 years, while the average for mutual funds is between three and a half and five years, he said.

Fleet's Galaxy Funds have instilled a sales culture that is deliberately independent from the firm's banking division, Mr. Ash said. "We're as cantankerous as you can be with bank executives."

In addition, Fleet's funds have established independent marketing alliances with several distributors outside the bank. Perhaps as a result, the funds have a low redemption rate, Mr. Ash said.

The longer that investors hold a fund, the less money portfolio managers need to keep on hand in case investors want to cash out. That means more of the fund's money can be invested, thereby improving performance, he said.

Banks have not traditionally sold their funds to retail customers other than depositors, but many are moving to do so. Summit Bank is looking to expand the marketing of its own funds, said Richard Mansfield, president and chief executive officer of Summit Financial Services.

To counteract the perception that bank funds are subpar, Summit is considering a branding campaign to specifically identify their funds with the bank, Mr. Mansfield said. The bank believes that customers may feel confident putting their money with a large institution such as Summit, he said.

Banks' efforts to mass-market funds have often been hampered by the banks' geographical focus, as well as by the fact that third-party marketers often view banks as direct competitors for selling retail funds, Mr. Mansfield said. Summit nonetheless has affiliations with 15 third-party marketers.

Kenneth Kehrer, principal of Kenneth Kehrer Associates in Princeton, N.J., said while many banks face a challenge in selling their funds to customers other than their depositors, some must also overcome the negative impressions of their own brokers for the funds.

Other brokers may not be aware of the substantial amount of extra profit that banks can make by selling their own funds, Mr. Kehrer said. Generally, for every $1 of profit from the sale of a third-party fund, a bank could make $2 by selling its own, he said.

Mr. Knopf said in many cases banks were late to start their funds, so some bank-affiliated brokers may not be pushing the sales of these funds as much as third-party funds.

Banks also vary widely in how well they sell their own funds, and there is some dispute as to how hard they should push their own funds. Until recently, Mr. Ash said, roughly 80% of the funds sold through Fleet branches were the bank's own Galaxy funds.

The company later intentionally reduced that number to around 50%, because it wanted customers to diversify their financial assets as much as possible, Mr. Ash said. Galaxy funds now make up between 44% and 55% of Fleet's sales.

For Bank One and First Union, proprietary funds make up 30% to 40% of their investment product sales, Mr. Kehrer said. However, proprietary funds at Summit, Compass Bancshares of Birmingham, Ala., and M&T Bank Corp. of Buffalo hover between 5% and 10% of their fund sales, he said.

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