There are signs that the gloomy outlook for bond mutual funds may be coming to an end.

After a year of negative sales, investors started moving money back into bond funds in February.

The development is good news for some big bank mutual fund managers, including Mellon Bank Corp., which in February gained about $1.3 billion of new infusions from investors to end the month with a $68.7 billion Dreyfus funds complex, according to Strategic Insight, a New York-based research firm.

But managers of many bank-affiliated brokerages, and mutual fund companies that sell through banks, said they did not notice a rise in bond fund sales through bank brokerages.

The Investment Company Institute reported last week that investors pumped $1.13 billion into fixed-income funds during February - the first net inflow of cash since February 1994.

At the same time, all long-term mutual funds saw positive inflows of $9.85 billion in February, compared with $2.77 billion that was pulled out in January.

The data measure new sales of mutual funds as well as money moving within funds of the same group. The figures do not include reinvested dividends or redemptions by shareholders.

Bank brokerage experts said that consumers are being cautious after spectacular losses in some bond funds last year. And many are preferring to park their money in higher yielding certificates of deposit instead of bond funds.

"We haven't seen much of an increase (in bond fund sales) principally because of competition from CDs," said Anthony P. Psilos, president of Hibernia Investment Services, New Orleans.

Even though the bank's mutual fund sales in March rose 50% over December's sales levels, Mr. Psilos said the majority of the increase has been in stock funds which have gained in popularity because of the recent stock market rally.

"I think the uptick in the equities market has made people really wake up to the money that can be made there," Mr. Psilos said.

At the same time, bond funds sales through banks have been compromised by strong CD rates.

"The same person that would invest in a bond fund is precisely the type that would put their money in a CD," said Jerome S. Contro, the national bank sales manager for John Nuveen & Co., a Chicago-based fund company.

Nuveen's bond fund sales levels have remained virtually unchanged since January, though he declined to give specific sales figures. By contrast, sales of the company's unit investment trusts are up 25% over the same period.

Unit investment trusts represent shares in a fixed portfolio of bonds or stocks, and have a fixed rate of return and maturity. The trusts appeal to conservative investors and have been particularly popular over the past year, Mr. Contro said.

Natwest Bank, a unit of National Westminster Bancorp, has also seen its sales of unit trusts go up 50% since the beginning of the year, according to Ramesh N. Shah, a senior vice president in charge of investment products.

Overall mutual fund sales have also picked up, but at a slower pace. Natwest's fund sales were up 35% in February, but the increase was spread equally over the bank's bond, stock, and balanced funds, Mr. Shah said.

More customers at Mark Twain Banks, in St. Louis, have inquired about bond funds, according to Peter Benoist, an executive vice president, but few have actually purchased any shares.

"There seems to be a pretty consistent interest in mutual funds overall, but we haven't seen a pick-up in our bond fund business," Mr. Benoist said.

Despite the low interest, Mr. Benoist said the bank's overall mutual fund sales in March were 15% higher than March of last year. He expects a pick up in bond fund sales in the second half of this year, "once investors become convinced that (interest) rates won't go up again."

Midlantic Bancorp., is having a hard time attracting customers to bond mutual funds. Most investors are preferring fixed-annuities to bond or stock funds, said Joseph Leinbach, vice president of mutual fund administration.

"Our customers are more conservative and are parking their money in fixed-rate investments instead of funds," Mr. Leinbach said.

At Midlantic, fixed-rate annuities represented 70% of all investment sales in February, compared with 20% the same time last year, he said.

But Mr. Leinbach said he expects bond funds to make a comeback sooner rather than later as concerns about rising interest rates taper off.

"People have short memories," Mr. Leinbach said. "They've probably forgotten what they were afraid of."

Cleveland-based Keycorp is already seeing small signs of a comeback. The banking company's proprietary bond funds ended March with $773 million in assets under management, a 7% jump from January's levels.

- Cristina Merrill contributed to this report.

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