Bank mutual fund operations received good news last fall with a federal ruling allowing them to publicize the historical performance of trust accounts that were the predecessors of many of their fund portfolios.

So with past performance so important in selling mutual funds, where are all the bank fund ads touting long-term performance?

Regulators expressed some surprise over the decidedly muted industry response to the go-ahead given by the Securities and Exchange Commission last September.

"It's kind of like this happened and where's the stampede?" said Thomas A. Pappas, assistant director for advertising regulation at the National Association of Securities Dealers in Washington.

Mr. Pappas acknowledged that the NASD has reviewed some advertising and sales material from banks that relies on the SEC ruling. But, he added, the volume "hasn't been heavy." And there have been few modifications to prospectuses either.

"We've seen a few funds come through but not an overwhelming number," said Jack W. Murphy, associate director and chief counsel of the SEC's division of investment management.

Citing member confidentiality, Mr. Pappas declined to elaborate on specific banks that have submitted marketing materials for review. U.S. Bancorp, Portland, Ore., for example, confirmed that it received the NASD go-ahead on Feb. 9 for a one-page marketing piece for its Small Companies Value Fund that includes information on trust performance.

Ultimately, banks' exploitation of the SEC's ruling may hinge on whether the historical data will be accepted by mutual fund rating firms like Morningstar and Lipper Analytical Services.

"We've been approached, and we're studying it" said A. Michael Lipper, the Summit, N.J., firm's president. "At some point we may take this data in - even though maybe we should put a surgeon general's warning on it - because at least in my mind the utility of it is questionable."

He said running a trust fund is inherently different from running a mutual fund. Even if mutual fund expenses are applied retroactively to trusts, as the SEC requires, Mr. Lipper remains skeptical. "Pressures to perform are different, moneys in and out are different -and most (trusts) don't have daily (net asset values)," he explained.

For many fund marketers, the key to success lies in winning a multistar rating from Chicago's Morningstar. So far, no bank has managed to snare one using past trust performance.

"Right now we're just waiting for someone to sell us on it," said John Rekenthaler, publisher at Morningstar.

But the real reason for the paucity of such promotional efforts by banks may well be that few have had trust performances worth bragging about. "As a practical matter, I would think no one wants to go out and advertise bad performance," the SEC's Mr. Murphy said.

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