Ethnic marketing has replaced equity underwriting, private equity investing and corporate lending as the hot business line in U.S. commercial banking. With assets down at mutual fund companies and the investment holdings of Hispanics, Asian-Americans and African-Americans expected to grow to $3.2 trillion by 2007 from $1.9 trillion today, it might pay the mutual fund industry to take note of minority investors.

Bank of America Corp. has taken a 25% stake in Mexico's third-biggest bank and simultaneously unveiled a Hispanic initiative. Citigroup, which already owns a large Mexican bank and has just bought a San Francisco thrift, recently celebrated a development project in a heavily Hispanic section of Oakland. Wells Fargo & Co. recently appointed its first director of diverse growth segments, and earlier this year, introduced Chinese-language features on 2,600 automated teller machines in 23 states.

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