Bank One Corp.'s mutual fund group is expanding its sector fund offerings today with the introduction of a new mortgage-backed securities fund.

The One Group Mortgage-Backed Securities Fund is the second sector fund rolled out by Bank One Investment Advisors. The Columbus, Ohio, unit introduced the One Group Technology Fund on July 31. The two new funds bring One Group to a total of 51 funds with $66.9 billion in assets under management.

Mark Beeson, senior managing director at Bank One Investment Advisors and head of One Group Mutual Funds, said the sector funds will be sold in Bank One branches nationally and possible through third-party providers. He said the unit was responding to customer demand.

Looking ahead, Mr. Beeson said, One Group is exploring other sectors in which to introduce funds, particularly health care. But nothing is imminent, he said.

"This is very consumer driven. We want to give our customers what they want," he said. "But if our customers want them, and our distribution channels can support them, we will offer more sector funds down the road."

The two new funds are each designed for distinct target audiences, Mr. Beeson said. "The tech fund is retail oriented and really in response to the public's yearning for tech funds. The mortgage fund is driven toward demand from the institutional marketplace."

The Mortgage-Backed Securities Fund will invest in investment grade bonds and debt securities, including mortgage-backed securities issued by Ginnie Mae, Fannie Mae, and Freddie Mac, as well as commercial mortgage securities and collateralized mortgage obligations.

The fund will offer class A and I shares. The minimum initial investment is $200,000. Mr. Beeson said the mortgage-backed securities market is rallying and savvy investors are looking to capitalize on it.

"Our institutional clients are going here from the slowing treasuries market," Mr. Beeson said. "We knew it was a good time to launch this product as the treasury market shrinks and investors look for the next market."

Mr. Beeson said that the underlying investments for the mortgage-backed securities fund such as Fanny Maes, and other mortgage products, are performing well and will continue to grow. Mr. Beeson said his fund managers also expect commercial mortgages to continue to expand.

Mr. Beeson said, Bank One delayed the introduction of its technology fund until the Nasdaq settled.

"There were a lot of us here that wanted to roll out the tech fund a year and a half ago, but cooler heads prevailed," Mr. Beeson said. "There were a lot of tech companies out there that we were uncomfortable with and that really pushed the introduction of this fund back."

The technology fund, which offers a minimum investment of $1,000, will invest in companies that are likely to have a large, rapidly growing and sustainable market, according to Mr. Beeson.

"Our tech fund is doing well. I think all the fly by night dot-coms are out of the picture and the core companies with good growth potential are really ready to flourish," Mr. Beeson said.

He added, "we believe that the whole tech sector is not here today gone tomorrow. It is a strong part of the economy and, going forward, there will be tremendous amounts spent on technology. It is clearly a good time to be part of that growth."

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