Just a couple of years ago, a

Merrill Lynch

(MER)

Internet fund would have been unthinkable in a shop known for its

value

slant.

But the broker's new

Internet Strategies

fund finishes a quiet two-week subscription period Friday in preparation for a March 22 launch. And that's just part of the firm's burgeoning growth movement.

"They've made a major effort to change their image among the Merrill troops, and the new Net fund is an obvious example of that," says Burt Greenwald, a Philadelphia-based mutual fund consultant.

Until recently, even many Merrill funds with a

growth

label had a decidedly value flavor, which left them dusted by peers in a growth market.

Last year many of the firm's 14,200 brokers -- the only people who sell Merrill funds -- voted with their feet, choosing to pitch other companies' products rather than their own. That contributed mightily to outflows from Merrill funds that totaled $13 billion. But amid last year's steep redemptions and broker rumblings, the firm, which manages $72.5 billion in fund assets, started beefing up its growth fund lineup, most recently and emphatically with the new Net fund.

The Internet Strategies fund should be good news to some of the firm's disenchanted brokers, whose clients are probably

demanding Internet and tech funds in a big way. About 50 cents of every dollar invested in stock mutual funds in January went to tech funds, and last year alone, $3.7 billion went into

(MNNAX) - Get Report

Munder NetNet, the largest broker-sold Internet fund, according to Boston fund-researcher

Financial Research

.

"More than anything else, this fund is the result of demand from their brokers. It's just that anything with Net, tech or telecom

in its name will sell," says Kunal Kapoor, a

Morningstar

analyst who covers Merrill funds.

Internet Strategies will be actively managed by

(MAGTX)

Global Technology skipper Paul Meeks.

It's not the firm's first Net offering. The fund has a predecessor that is offered to non-U.S. investors, and since last year, U.S. investors have been able to buy shares of Merrill's seven

HOLDRs securities -- exchange-traded trusts that hold a fixed basket of stocks. Four HOLDRs focus on the Internet or one corner of it.

Given the strength of the sales figures for technology funds, it's no surprise Merrill and other fund companies are rolling out new tech funds to keep from being shut out of the action. Several other fund companies known for conservative styles, including

Delaware Investments

,

TST Recommends

Neuberger Berman

and

Loomis Sayles

have recently launched tech funds, and many, many more funds are in the product development pipeline.

'Growthier' Growth Funds

But this isn't just a one-fund band-aid for Merrill. The firm has broader plans to build up its growth funds, and the architects are Jeff Peek and Bob Doll, president and Americas chief investment officer, respectively, of the firm's asset management arm. They've added growth managers and made growth-labeled funds look more, well, growthy.

One key addition is high-profile growth manager James McCall. McCall ran several

PBHG

funds, including

(PLCPX) - Get Report

Large Cap 20. This week two funds McCall will run for Merrill

raised more than $1 billion in subscription launches. McCall may end up running offshore versions of these two funds as well as a new mid-cap growth fund later this year.

Earlier, Peek and Doll stole highly regarded growth-at-a-reasonable-price manager George Burwell from Delaware Investments.

They've also overseen makeovers on Merrill funds like

(MAQRX)

Growth, which actually tended to favor value stocks. Stephen Silverman took the reins at the start of 1999, and over the past year the fund's 51.3% return beats about 70% of its large-cap growth peers, according to Morningstar. Of course, this isn't necessarily a quick fix since the fund lags most of its peers over the past three-, five- and 10-year periods. But if Silverman can keep it up, he might start winning brokers over. He could also earn himself another fund without the albatross of a sagging long-term record.

And

Mercury Funds

, Merrill's London-based asset management subsidiary that sells funds in the U.S., just announced plans to slap its label on solid-performing but under-appreciated

(TLCGX)

Turner Large Cap Growth.

Late to the Net Party

But adding

diversified

growth funds is one thing. Adding a Net fund is another.

Morningstar's Kapoor says the firm has filled out its fund family without ignoring its value funds or changing its stripes, but he thinks the Net fund could raise a few questions. Unlike diversified growth funds, this subsector fund could be a bit late to the party.

With volatility and valuations high and more than 20 Internet funds already out there, the market is hardly the ripe niche it was back in 1996.

Big competitors like

Janus

and

Fidelity

still don't have Net funds, preferring to offer tech funds that can selectively invest in the land of high returns and negligible profits.

Like many of the latest Internet offerings, the fund won't necessarily focus strictly on pure-play Net companies. This might be a good fit with Meeks' style, since he tends to shun outsize bets on a single stock or tech subsector. He has run Global Technology with that slightly risk-averse style since its June 1998 inception, posting big returns but trailing more aggressive peers. He's up 144% over the past year, but that gaudy number trails almost 70% of his peers, according to Morningstar.

Ironically, if tech stocks keep gyrating, the shop with growth envy could benefit from Meeks' more conservative style.