Federated Investors Inc. thinks stock volatility will make its specialized multisector fixed-income funds more attractive than stock funds to bank trust department customers and pension fund managers, an executive said.

The Pittsburgh provider of bank mutual funds has long preached that fixed-income products are important for a balanced portfolio. But the shaky stock market may cause formerly equity-mad investors to be more receptive now, said Tim Pillion, senior vice president in charge of bank marketing.

"Sometimes bad things have to happen for people to stop and listen," Mr. Pillion said.

Federated already sells eight multisector bond funds to trust departments and pension funds, and plans to roll out more soon, he said. Its multisector fixed-income funds invest in diversified government, corporate, Treasury, and mortgage-backed bonds from issuers around the world.

Multisector bond funds will become more important if the U.S. government keeps paying off its debt, making Treasury bonds more expensive, Mr. Pillion said. Such funds could provide at least some of the liquidity and safety that Treasuries now offer investors, he said.

Federated's marketing campaign will emphasize that bond funds offer monthly dividends and lower risk than equity funds. The company hopes to sell $5 billion to $10 billion of multisector bond funds through bank trust departments in the next two years, Mr. Pillion said.

Federated currently managers $25 billion in fixed-income assets - $110 billion if money market funds are included - and about $30 billion in equity funds, Mr. Pillion said. It has been distributing its funds through banks for about 25 years, he said.

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