A ruling permitting investment advisers to publicize track records of trust accounts even after they are converted to mutual funds has come too late for many banks, industry observers said.

The ruling by the Securities and Exchange Commission lifted restrictions that allowed investment managers to mention a converted account's past performance only in its prospectus, and only for the first year of the fund's life.

A handful of banks that launched proprietary mutual funds in the last few years - among them Bancorp Hawaii and U.S. Bancorp - are expected to take advantage of the decision.

But most industry observers interviewed last week said the new policy, spelled out last fall in a letter to the Massachusetts Mutual Life Insurance Co., will have limited impact.

"We looked at it but decided against it," said John L. Rudisill, senior vice president for mutual funds at First Security Corp., Salt Lake City.

Mr. Rudisill said the banking company's mutual funds, launched in late 1994, used a slightly more aggressive investment style than their trust predecessors.

That makes First Security ineligible to take advantage of the ruling, which allows investment advisers to promote the historical performance of a mutual fund only if the fund's investment objectives are virtually identical to those of its predecessor trust fund.

R. Gregory Knopf, managing director of Los Angeles-based Union Bank's Stepstone Mutual Funds, said his company, too, decided against applying the decision to its funds.

"We have an attractive track on our own and our average fund is about five years old," Mr. Knopf said.

However, he added, "people who are in a start-up mode or who started their funds recently can compete much more effectively" by using the ruling.

To be sure, some bankers cheered the development, saying the ability to carry a trust account's performance record over to a mutual fund can provide an important marketing edge.

"It's critical," said Timothy Leach, president of Qualivest Capital Management, U.S. Bancorp's mutual fund unit. "Five years is the standard for (judging) long-term funds."

And the SEC decision is sure to get a close look from the dozens of banks that created mutual funds from converted trust accounts in recent years - and in the process were severely restricted in their ability to tout track records from their trust days.

Federated Investors, which distributes and administers bank-managed mutual funds with about $60 billion in assets, is asking its clients to consider whether to take advantage of the ruling.

"It's not an automatic that you're going to be able to use one of your sources of assets for historical performance, but it's a routine evaluation now," said Peter J. Germain, senior corporate counsel of Federated Investors.

Trust conversions account for roughly 60% of bank mutual fund assets, according to Cerulli Associates, a Boston consulting firm.

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