It's nearly Christmas, and State Street Boston Corp. is celebrating a gift of a very special kind.

Long known as a powerhouse in securities custody, the Bostonbased banking company can now boast of an honest-to-goodness success in the retail market -- a hotshot mutual fund that has piqued the interest of retail investors.

The Seven Seas Emerging Markets Fund, which was launched in March, has delivered a total return since inception of 14.2%.

Lipper Analytical Services Inc., Summit, N.J., ranks it as the best-performing emerging markets fund in the six months ending in November, and the ninth-best stock mutual fund in the third quarter.

Even though emerging markets funds are notoriously volatile, these numbers have attracted publicity, which has whetted the appetites of retail investors.

In the biggest media event, the emerging market fund's portfolio manager, 31-year old Robert E. Furdak, was a featured guest last week on CNBC's nightly show, "Mutual Fund Investor."

Gus V. Fish Jr., a principal of State Street's money management unit, said 100 to 150 calls a day have been coming in from retail investors and financial planners since Mr. Furdak's appearance on the cable television program.

These are big numbers for a company that has never targeted retail investors, and doesn't have a retail branch network to speak of.

But will State Street try to use this success to become another Fidelity Investments? Probably not, said Mr. Fish, who is manager of the company's Seven Seas mutual fund family.

"We're just not going to focus on that end of the business," he explained.

The reason is that retail banking isn't in State Street's blood. Indeed, the company only got into the mutual fund business in 1988 to help its core institutional clientele with their cash management needs.

In 1992, State Street started launching its first long-term funds. Money market portfolios still have the bulk of the family's $6 billion of assets, but some of the long-term funds have done well of late.

For example, five of the seven long-term portfolios tracked by Lipper ranked above average in total return in their category this year. The S&P 500 fund came first in its group, while a Yield Plus portfolio was the second best performing short-term investment grade debt fund.

The mutual funds are managed as part of the Global Advisors money management unit, which is investment manager for $140 billion of investments, mostly taxfree assets for pensions and retirement plans.

State Street has toyed with the idea of going after the retail market. Specifically, Mr. Fish said that State Street is just wrapping up a six-month trial of advertising the emerging markets fund in Worth and Travel & Leisure magazines.

But he said the bank has learned enough from that test to realize it isn't well positioned to make a serious run at the retail mutual fund business.

Instead, the company is focusing on sales to institutional clients -- both current customers and institutional investors that don't currently have a relationship with the bank.

State Street also is marketing its funds to financial planners, through advertisements in speciality publications, and by making the emerging markets fund available through a Charles Schwab Corp. computerized investing service for financial planners.

Eli Neusner, a consultant with Cerulli Associates Inc., Boston, said State Street's approach seemed reasonable, given its background.

But Mr. Fish hastened to add that Seven Seas funds welcome retail investors who seek them out. And the funds themselves can be pretty attractive to a retail clientele.

The minimum investment is $1,000. The funds don't carry a sales load, and charge expenses that are well below average for retail funds, and on the low side for institutional funds, Mr. Fish said.

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