After months on the sidelines, bank brokerage customers are finally getting into the stock fund game.

That's the word from mutual fund executives and bank brokerage chiefs. In a round of interviews last week, these players said they've begun to see clear interest in stock funds from the very customers who once clung to bond funds.

Mutual fund executives say bankers are doing a better job of educating customers about investing for the long haul.

"Bank managements want to diversify their fund offerings better," said Maryann Bruce, senior vice president and director of the financial institution division at Oppenheimer Management Co.

That, she said, is a dramatic shift. Prior to last year's bond-market crash, many bank brokerages hadn't introduced customers to anything but bond funds.

"They saw what happened last year. The ones that focused exclusively on fixed-income funds saw their sales decline precipitously," Ms. Bruce said.

The optimism for June follows last month's strong stock fund sales, reported last week by the Investment Company Institute, a Washington-based mutual fund trade group.

Though May's $8.7 billion of net new sales in stock funds was a decrease from April sales of $10.1 billion, fund executives weren't surprised. They attributed April's high to tax season, when investors typically pour money into individual retirement accounts.

Net new sales for all mutual funds dropped to $10.9 billion in May from $11.8 billion the prior month, according to the institute.

While stock sales were strong, bond fund sales fared well in May, too. Investors pumped a new $287.3 million into bond and income funds, compared to an outflow of $317.7 million in April, the institute reported.

Ms. Bruce, whose company manages $31.7 billion of assets, said four of her six top-selling funds through banks were equity funds: Main Street Income and Growth Fund, Oppenheimer Total Return Fund, Oppenheimer Equity Income Fund, and Oppenheimer Global Fund.

She said June is shaping up as Oppenheimer's best month this year, with sales jumping 10.7% from May. She said the company is doing well because it has remained on banks' preferred lists even as many banks are whittling them down.

Presidents of several bank brokerage units confirmed that they are selling more equity funds than fixed-income funds or fixed annuities. Dean Kelly, president of the brokerage unit at Michigan National Corp., said the most popular funds sold this month were the Putnam Growth and Income Fund, Fidelity Advisors Income and Growth Fund, and two income funds offered by American Capital Family of Funds.

Mr. Kelly tipped his hat to declining interest rates and surges in the stock market, but his bank is also pushing brokers to consider customers' long-term investment needs.

He is reimbursing brokers who seek out extra credentials that make them more credible in the eyes of the bank customer. One fourth of his 56 brokers either have or are studying to get their certificates of financial planning.

"We're also looking into buying financial planning software, although we haven't made any decisions yet," Mr. Kelly said.

Equity funds are getting major play at other banks too. Peter Sheehan, president of Citizens Investment Services, Providence, R.I., said 75% of his sales come from equity funds, particularly Fidelity Advisor Growth and Opportunity Fund and Putnam Investments Growth and Income Fund.

He added that mutual fund sales should be up about 10% in June over May.

Most bank customers are first-time mutual fund buyers, so income funds have become the most popular equity funds sold through banks, said Barry Knight, vice president of financial institutions sales at Pioneer Group.

Equity income funds generally invest in stocks of large, established companies, and are thus considered less volatile than the small stocks that more aggressive mutual funds invest in.

"Income funds are a natural first step to take into equities as we move bank customers out of fixed income funds," Mr. Knight said.

The trend toward equities is also reflected in the sales results at Massachusetts Financial Services, a Boston-based company that manages $26.2 billion of fund assets.

Equity funds are contributing 85% of sales through banks at said the company's Lisa Jones, director of financial institutions sales and marketing. "Two years ago, 25% of our sales were equity funds," she said.

She said sales are on track to jump 10% in June. Ms. Jones said popular funds through banks include MFS Total Return Fund, MFS Research Growth and Income Fund and MFS Emerging Growth Fund.

Still, not all mutual fund companies are seeing the same results with their equity funds. Eaton Vance Distributors Inc. is finding that its equity funds aren't making bank preferred lists.

"Banks are intent on building up their proprietary products," said John Trotsky, vice president of marketing. Eaton Vance, which manages $14.4 billion of fund assets, lacks the name recognition of its larger counterparts, so bank brokers are reluctant to sell the company's funds, he said.

Eaton Vance has also seen a decline in sales in its 140 state tax-free bond funds, which it promotes heavily through banks. However, May sales were up 8% over April, and June is "on track" to equal those results, he said.

Picking up the slack are two closed-end funds intended to generate high monthly income for investors: Eaton Vance's Prime Rate Resources and the Eaton Vance Classic Senior Floating Rate Funds.

Mr. Trotsky's trouble getting play for his equity funds makes him skeptical whether banks are really as interested in a long-term investment approach, as his rivals say.

"It's easy to sell name recognition," he said.

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