As I reviewed the responses to QE3, I ended up checking out the #AskMcNabb hashtag used for Vanguard’s Twitter Q&A with its CEO. Check out what showed up as the promoted Tweet at the top of the thread:
It’s not just fees. The big ETF players are competing hard across the board.
It’s almost old news by now. Yesterday, the Fed announced QE3 and ongoing purchases of mortgage-backed securities at the rate of $40B per month. So, how did asset managers respond?
Using Twitter as an (incomplete) proxy for firms’ responses, here’s the short, chronological list of activity as of 5pm on the day of the news:
That is six responses within about six hours. As a sidebar, it’s interesting that none of the content referenced any of trending conversations on Twitter (#QE3, #Fed, etc.). Per the screen capture below, a search showed Oppenheimer and Russell taking advantage of Twitter’s social features. But these were from before the Fed’s announcement.
I don’t know exactly what I expected when I started to look, but overall I’d characterize the volume as a bit disappointing. The biggest financial news of the week warranted a bigger, faster response. Firms know that; it’s still a matter of getting the process ironed out.
More high-quality education that’s relevant for both direct investors and FAs advising clients on tenets of good long-term investing.
Three worthwhile reads from last week.
Last weekend, I opened the Sunday paper and the typical coupons and advertisements fell out. There was an unusual one – a full page, heavy-card stock advertisement for IAU. IAU is BlackRock’s iShares ETF that tracks gold’s price. I never received an ETF or Mutual Fund advertisement via the newspaper. I asked Mike, my dad and a friend – to the best of our knowledge; nobody had. Interesting – maybe revolutionary!
The IAU insert from the New York Times. Click to enlarge.
My initial reactions:
Clarity
The advertisement assumes the viewer is already interested in gold. Then there are five different reasons to invest in IAU over other options. From the advertisement, I think, maybe it’s time to invest in gold and maybe I should do that through an ETF. I wonder if IAU is the best option. My thought process is the best BlackRock can hope for. So, the message is very clear.
Cost
Is this expensive? Expense is relative to value or return; so I can’t really say. Yet, I wonder if BlackRock can measure this ad’s effectiveness. For investors buying IAU via brokerage accounts, there’s no way for BlackRock to measure those sales. Potentially, this advertisement is simply seen as an effort to elevate the firm’s brand and products to a more ‘top of mind’ status. In that context, it’s hard to say if the ad is expensive.
Call-to-Action
The ad lists a telephone number and Web site. I visited the Web site listed (www.ishares.com/gold). I want a continuation of knowledge sharing, instead it’s a bit repetitive. Initially, I see the same bullets; when I click “Learn More,” I’m immediately sent to the Fund Overview page. This Call-to-Action isn’t strong enough.
I’m curious to what you think. Good idea for industry leaders like BlackRock? Does the idea scale down well to other firms?