NationsBank Corp., widely considered one of the most ambitious banks in the mutual fund business, is stepping up its pursuit of novice investors.

The North Carolina banking company is developing a new line of mutual funds geared to keep pace with investors' changing financial needs over periods as long as several decades.

Andrew M. Silton, president of the company's money management arm, TradeStreet Investment Associates, said he is aiming to launch the funds in three to six months.

Such investments, known as life-cycle funds, are a rarity in the mutual fund industry, but they are catching on fast with consumers.

"People are looking for a vehicle that in one fell swoop gives them a variety of disciplined ways to invest their money for the long haul," Mr. Silton said in a recent interview.

NationsBank's move reflects a push by banks and mutual fund companies to make long-term investing easier for consumers to grasp, and in the process attract and retain more of their customer's assets.

So far, only Wells Fargo & Co., BankAmerica Corp., and Putnam Investments offer life-cycle funds, which typically blend stock, bond, and money market instruments. The investment mix is usually riskiest in the early years, tapering off to a milder brew as the investor gets closer to a targeted withdrawal date.

Experts say the appeal of life-cycle funds lies in their inherent simplicity. Many first-time investors are uneasy with picking mutual funds, and with spreading their money across several portfolios that need steady monitoring.

"They feel more comfortable knowing that their money is going to stay in one fund that will adapt as time goes by to meet their financial goals," said Les Dinkin, managing principal of NBW Consulting, Westport, Conn.

Though life-cycle funds are quite a new phenomenon - Wells Fargo launched the first ones in late 1994 - they "have been wildly successful at attracting assets," said Dennis Dolego, a partner with Financial Research Corp., a Chicago-based consulting firm.

Wells Fargo's LifePath Funds pulled in $590 million of assets in their first year, Mr. Dolego said.

NationsBank's move to expand its investment services with an innovative product underscores its determination to "be a leader in this industry," he added.

NationsBank managed $17.1 billion in mutual fund assets at yearend 1995, placing it third among banks in the mutual fund business, according to Lipper Analytical Services, Summit, N.J.

NationsBank ranks in the low 20s among all sellers of mutual funds, however, and it is determined to boost its standing by attracting new investors.

New product offerings like the life-cycle funds should help the company "persuade potential and existing clients that they should put more of their assets under our management," Mr. Silton said.

He said his aim is to generate growth through sales. "It's not part of my business plan to wait around for NationsBank to make an acquisition and see what part will make our business grow."

On a recent visit to New York, Mr. Silton made clear the company is busy crafting the life-cycle funds. However, in a follow-up telephone interview, he said some alternatives - including a simpler asset allocation product - are also under consideration.

Mr. Silton said NationsBank is also weighing the idea of developing a mutual fund wrap account that charges customers a management fee, and matches their investment goals by distributing money across several NationsFund portfolios.

NationsBank has certainly not hesitated to experiment with its investment offerings. In 1992, it made a big splash by forming a joint venture with Dean Witter Financial Services that would put brokers in every NationsBank office.

When that deal unraveled after two years, NationsBank turned it sights overseas, teaming with international money manager Gartmore PLC to manage and sell mutual funds. Gartmore went on the auction block late last year, and NationsBank is said to be weighing an option to buy the firm.

"NationsBank is a tinkerer, always willing to try different things," said Kenneth R. Hoffman, president of the Optima Group, a Fairfield, Conn.- based consultancy.

Last November, the company combined its mutual fund and institutional asset management businesses under the umbrella of TradeStreet Investment Associates. The money management arm, which controls $31 billion, was conceived as an entrepreneurial entity that would enable NationsBank to attract and retain top-notch money managers.

The following month, NationsBank confirmed plans to unveil a family of no-load mutual funds, a move seen as a bid to draw sophisticated investors.

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