In a year that finds sales of mutual funds down by one-third industrywide, MFS Investment Management has had steady retail bank fund sales and a marked increase in sales through bank trust departments.

The Boston fund company appears to be on schedule to reach the goals Michael D. Fitzgerald, vice president of MFS Trust Group, set in March of 2000. He said in March 2000 that the unit aimed to double its sales through bank trusts in 2001 and reach yearly sales of $3 billion to $4 billion within three years.

In the first six months MFS Trust formed 56 new relationships with bank trusts and had an 11% sales gain, Mr. Fitzgerald said. Through July its fund sales through bank trusts were $847 million, against $440 million in the first seven months of 2000. Sales for all of 2000 rose by $150 million, to $900 million. Through the first half it had institutional assets of about $35 billion. That included separate accounts and assets it subadvises for other managers, Mr. Fitzgerald said.

One reason it has been able to put up all these numbers is its work in recent years to cultivate relationships with bank trust departments, Mr. Fitzgerald said. These relationships take time to develop, because trust officers insist on in-depth information about how a fund invests, solid performance, and continuous access to a fund company's wholesalers for product support, he said.

In addition to the 89 wholesalers who visit bank brokerages, MFS has nine wholesalers who cover bank trusts exclusively. Three visit the top 50 national banks and six visit regional banks, Mr. Fitzgerald said.

Also, the company's funds have had consistent if not always stellar returns, which helped on the bank trust side as well as on the retail side.

Jim FitzGerald, the executive vice president and director of MFS Investment Management's financial institution and adviser division (and no relation to Mr. Fitzgerald), said the added emphasis that MFS put on the bank channel as a whole within the past year kept its bank sales of retail mutual fund sales from dropping.

The Investment Company Institute, the primary trade organization for the mutual fund industry, said the industry's mutual funds net inflows plunged to $89.3 billion in the first half from $151.7 billion in the first half of 2000.

According to the mutual fund tracking firm Financial Research Corp. in Boston, MFS had positive flows of $5.6 billion in the first half of 2001, versus $6 billion in the year-ago period.

Bank overall are also buying more conservative products, a trend that helped the company move more of its value-oriented funds, Mr. FitzGerald said.

"We've had clients who passed us over" when growth funds became popular in the late 1990s "because we weren't aggressive enough," he said.

MFS Investment's parent company, Toronto-based Sun Life Financial Services Co., reported last month that the subsidiary's second-quarter net income rose 5% from the year-earlier period, to $42 million. Sun Life attributed the increase to cost control and positive net funds inflow.

And even though first-half sales at some of the banks that sell MFS's funds fell short - some reported that sales were down 20% to 50% compared with last year, Mr. FitzGerald said - at the largest banks through which it distributes, sales are basically at 2000's levels.

The larger banks account for most of MFS's retail bank fund sales, he said. One reason for the relative continuity in sales is last year's restructuring of its wholesaler network, which consolidated bank and adviser wholesaler channels and enabled MFS to put more wholesalers in the banks that sell the most of its mutual funds, Mr. FitzGerald said.

Mr. FitzGerald also expects a separate accounts product to bring in assets at a good clip starting next year, when it will be sold to banks and advisers. The product, developed in 2000, is being pitched exclusively to New York wirehouses.

Many banks are by nature reluctant to rush into new products and hence are not ready to sell separate accounts to their clients, but that will change in the near future as bank customers begin demanding these products, Mr. FitzGerald said.

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