Banks eager to snare their share of today's raging bull market are expanding the menus of mutual fund families they offer to investors.

A few years ago, banks started to pare down their so-called "short lists" when the universe of mutual funds they sold became too unwieldy. But some industry insiders now say they may have whittled too much.

"To get the best of the best, they have to offer more families than they thought they could get away with before," said Richard A. Davies, senior vice president at Alliance Capital, a New York fund company. Alliance is one of many fund companies eager for banks to push their portfolios.

Chase Manhattan Bank recently added some niche fund families to its short list, including some from Delaware Management Co., a bank spokesman said. The bank's short list offers between 15 and 20 fund families, he said, in addition to its proprietary Vista Funds.

"Customers demand market performance, so banks don't want to be left in the dust with a narrow product range when others have an extended range," said Richard Ross, at Fifty-plus Communications Consulting, Glencoe, Ill. Mutual fund investors are increasingly savvy customers, and they want a choice of investments, he said.

"The extremely short list was leaving many (investors) unsatisfied," said Mr. Davies. Banks that once offered three to four fund families now offer six to seven, he said.

First Chicago NBD has eight fund families on its short list, which includes five general and three niche fund families. Union Bank of California offers customers five fund families, and Banc One's two-year-old list contains seven fund families. Each of the banks also offers investors their own proprietary mutual funds.

But one industry consultant said the purpose of a short list is to make the bank's business more important to the fund companies on its list. Expanding such lists defeats that purpose.

"While five might have been too short, I don't think 30 will be as meaningful," said Geoffrey H. Bobroff, a mutual fund consultant in East Greenwich, R.I. "If you've got Putnam, AIM, and Franklin, what other funds do you need?"

Mr. Davies agreed that funds may be indistinguishable. Still, he said, some customers want a wide selection.

"I think the investing public is being trained that choice is good," he said.

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