product line, has rolled out a large-capitalization growth fund. The move is the latest by the Pittsburgh company to build up its array of equity funds. Most of Federated's assets have long been in money market funds and bond funds. The fund launch is part of an effort to extend the company's equity management business beyond the value-investing approach for which it is best known, said J. Thomas Madden, chief investment officer for Federated's domestic equity and high-yield funds. Federated started moving in that direction with a small-cap fund it introduced in 1995 and an aggressive growth fund it unveiled in 1996. Equity funds made up just 7.9% of Federated's fund assets at the end of 1994 but 13.2% last Sept. 30. The company also plans to launch sector funds, investing in geographic areas or particular industries, Mr. Madden said. He declined to give more specifics. "They are trying to remold themselves into a manager with a broad spectrum of funds," said Burton J. Greenwald, a mutual fund consultant in Philadelphia. "They want to have a horse in every race." As it expands its product mix, Federated is broadening distribution in the United States and overseas. The company has long done most of its business through trust companies. But during the last few years it has pushed into other sales channels and has made particular headway through brokerages, including those at banks. Brokerages accounted for 32% of the company's assets at the end of the third quarter, up from 30% at yearend 1994. Federated has about $100 billion of assets under management in mutual funds and separate accounts. The company, which has developed successful international funds in recent years, is also eyeing foreign markets for distribution. In November, Federated an-nounced a joint venture with a German insurance company to manage and sell a family of mutual funds to the insurer's clients. Federated sees the relationship as a foothold in the quickly developing European market for asset management, said Mr. Madden. Leading the management of the new fund is Jim Grefenstette, who co-heads the growth investment team. That group manages $1.5 billion of assets and several of the company's 30 equity funds. The new fund will own about 100 of the largest growth stocks traded in the U.S. stock market and will use a "buy and hold" strategy and other techniques to minimize taxes, the company said. It opened to investors Tuesday.

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