Banks are known more for managing bond and money market mutual funds than for high-flying technology funds. Yet a fund managed by Chicago's Northern Trust Co. ranks among the top-performing technology portfolios in the country.

The bank's Northern Technology Fund had a 20.45% return for the three months ended Oct. 31, according to a study by CDA-Wiesenberger, Rockville, Md. The average technology fund returned 11% during these three months, CDA said.

Because they cater to conservative customers interested in money market or bond funds, banks have stayed away from potentially volatile funds, such as those that invest in technology companies, said Daniel L. Phelps, a CDA-Wiesenberger senior analyst. Of the 24 technology funds ranked by CDA, only two are managed by banks - the Northern Trust fund and one managed by First Bank System Inc., Minneapolis.

"Banks don't want to offer things that might lose money," Mr. Phelps said. "That's why banks are so good with bond funds because they don't fluctuate that much."

The strong performance of the Northern Technology fund, which was ranked fourth among tech funds, and of First American Technology Fund, which was ranked eighth, shows that banks are trying to escape the "conservative" stigma, Mr. Phelps said.

The Northern Technology fund, which was introduced April 1, is managed by John B. Leo. He had managed a common trust that invested in technology funds before the retail mutual fund's inception.

Mr. Leo said he built the portfolio's core around large, well-known technology companies such as Microsoft Corp. and Intel Corp.

He said his strategy of reducing investment exposure to the semiconductor industry this year and adding investments in telecommunications bodes well for the fund's yield.

"We try to identify companies that are leaders in industries in niches in the technology universe," Mr. Leo said. He looks for companies that are growing rapidly and that already have large market shares.

McAfee Corp., a Santa Clara, Calif., company that specializes in virus detection and network software, is one of the mutual fund's successful investments, Mr. Leo said.

"They have shown an ability to bring low-cost and high-quality solutions to market," he said.

In its first six months, Northern Trust's technology fund amassed $22.8 million of assets. Nine technology funds averaged $13.5 million of asset growth in their first six months doing business, according to CDA- Wiesenberger.

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