Bank One Corp. vaulted up the ranks of U.S. fund managers Monday by combining its mutual fund family with that of the former First Chicago NBD Corp.

Including $23.6 billion of assets from First Chicago's Pegasus family, Bank One's One Group fund family manages $56.2 billion. The fund families' parent companies merged Oct. 2 to become Chicago-based Bank One.

If the One Group funds merger had taken place Jan. 31, Bank One's proprietary funds would rank between those of First Union Corp. (No. 26) and PNC Bank Corp. (No. 27), according to the Investment Company Institute, a Washington trade group. Bank One was ranked 34th at the time.

The 48 One Group portfolios, which were pared from the 34 One Group and 30 Pegasus funds, are offered in four share classes. No funds were eliminated; 16 from each family with similar investment strategies, such as S&P 500 index or high-yield bond, were merged.

The merger vastly improves One Group, said David J. Kundert, the chairman and chief executive officer of Banc One Investment Advisors in Columbus, Ohio.

"For an organization of our size, having a branded mutual fund family that is one of the top 25 in the country is a pretty significant step," Mr. Kundert said.

The only bank-affiliated family in the top 25 funds on Jan. 31 was Dreyfus from Mellon Bank Corp. Others - notably Chase Manhattan Corp.'s Vista family, which ranked 30th, with $46.4 billion of assets under management at the end of January - are gaining heft.

"The bigger you get, the greater amount of leverage you have over a number of things," Mr. Kundert said.

One of those is expenses. The more assets managed by a fund family, the more pricing breaks it gets from service providers.

Also, funds can expand without additions to internal costs. Eleven of the 46 portfolio managers and analysts who worked for First Chicago have joined One Group, for a total of 57. Mr. Kundert said three of the teams- small-cap value, international equity, and a fixed-income portfolio-are led by managers from First Chicago.

Close to half the assets-$26.3 billion-are in money market mutual funds, and $17 billion are in equity funds. The rest are in tax-exempt municipal, fixed-income, and balanced funds.

Plans for the One Group merger began last year, but issues of portfolio management and personnel had to be worked out.

Both families were administered and distributed by Bisys Group, but Pegasus had done its own fund accounting, which involves pricing securities in portfolios to strike a daily net asset value. The fund accounting of Pegasus and some staff were transferred in the fall to One Group Services Corp., a Bisys subsidiary in Columbus.

The next sizable bank-affiliated fund merger will be at BankAmerica Corp., based in Charlotte, N.C. Its predecessors, NationsBank and BankAmerica, managed $42.6 billion and $24.6 billion, respectively, at Jan. 31, according to the Investment Company Institute. Shareholder approval for the fund merger is expected in April, a spokeswoman said.

The heft afforded by fund mergers does bring additional clout, said Geoffrey H. Bobroff, a mutual fund consultant based in East Greenwich, R.I. "It gives you more leverage to attract and retain investment professionals."

But there is a drawback: Portfolio managers may job-hunt before appointments are made in a merger. "Even though you win, it doesn't mean you're going to stay," Mr. Bobroff said.

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