Merrill Lynch & Co. launched a new securities vehicle Friday that lets investors put money in 20 regional banks at once.

Regional Bank HOLDRs - which stands for holding company depositary receipts - are equity-like securities tied to the 20 banks' stocks. Each security is made up of 290 shares of stock, including 24 shares of Wells Fargo & Co., 25 shares of Fleet Boston Financial Corp., 33 shares of Bank One Corp., and 29 shares of First Union Corp.

Merrill sold the newfangled securities, which have an asset value of $135 million and a market capitalization of $141 million, to a range of retail and individual investors.

On Friday some stocks performed worse than the single security that linked them. The Regional Bank HOLDRs fell almost $1.875, or 1.93% to $95.125 on a day when many bank stocks rallied after a rocky week of sharp gains and losses. Wells Fargo & Co. fell 37.5 cents, or 0.94% to $39.4375; FleetBoston, $1.125, or 2.96% to $36.875; Bank One, 17.75 cents, or 0.66% to $28; and First Union, 93.75 cents, or 3.26% to $27.8125.

Steve Bodurtha, who heads Merrill's customized investments group, acknowledged that Merrill's new security is coming out at a time when the banking sector is out of favor. "We picked banks that were very representative of the sector," he said.

The securities are designed to help investors diversify their portfolios, he said.

Investors have become increasingly concerned about credit quality since Wachovia Corp. of Winston Salem, N.C., Unionbancal Corp. of San Francisco, and Pacific Century Financial Corp. of Honolulu warned of shortfalls in their second-quarter earnings because of problem loans.

But Mr. Bodurtha said that investors continue to have an interest in the industry. Merrill already has HOLDRs for 12 other industries, including biotechnology, telecommunications, pharmaceuticals, business-to-business Internet companies, semiconductor companies, and a utilities HOLDR, which was also launched Friday.

The bank and utility securities round out Merrill's menu of industries and enable investors to diversify their portfolios, Mr. Bodurtha said. "There are investor who are still interested in Old Economy stocks," he said.

The securities have sparked some interest because they let investors monitor 20 stocks through one asset. Investors also have the option of "unbundling" the security at any time, Mr. Bodurtha said.

Merrill Lynch created its first HOLDRs two years ago when Telebras, Brazil's telephone company, was broken up into 12 companies. "We were trying to think of a way where investors could invest in all 12 companies at the same time conveniently," Mr. Bodurtha said.

Many bank stocks rallied Friday as investors became more convinced that the Federal Reserve would ease off its aggressive stance on interest rates.

The American Banker index of the 50 largest banks fell 0.30%, but its index of 225 banks rose 0.05%.

Monetary policymakers have raised interest rates six times since last summer. During their last meeting, in May, they raised short-term rates 50 basis points. The policymaking panel is to meet again this week.

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