Vanguard

Best Blogs of the Week

Posted by Anu Heda on May 09, 2011, in Best Blogs of the Week , tagged with , , ,

Last week presented a few interesting topics we thought to share.

  1. Vanguard – In celebrating the index investing’s 35 birthday (and their own success therein), Craig Stock posts a compact history for indexing.
  2. Virtus – Joe Terranova provides an easily digestible summary of major currencies in one post.  He uses a few charts, but doesn’t become bogged down in statistics or data points.
  3. Russell – The post describes the difficulty in selecting high-performing assets.  Additionally, there’s a 1-question poll that captures readers’ opinions

Mobile Sites – Not Dead Yet!

Posted by Anu Heda on Dec 20, 2010, in Thoughts , tagged with ,

We reviewed a dozen Web sites recently through our smartphone browsers.  Most experiences were bad.  If you’re considering improving your firm’s mobile experience we have three quick ideas:

  1. Redirect users to a .mobi site – most homepages were developed for a computer browser and don’t fit well on a small screen.  Some firms do an elegant job of redirecting the user to a DOT MOBI site configured for mobile devices.  That is a great experience.
  2. Make it lean – place only the most sought after and direct information on a mobile site.  Usually, that means bringing users to price & performance or bulleted commentary.

    Image from Vanguard Mobile Site

  3. Make it shareable – make it easy for the user to send a link directly to the mobile site. Many users will look something up on your mobile site only to share it with a colleague or client.  It’s not easy in a smartphone to “cut URL, tab to Outlook, create new mail, paste URL.”  Make this simple through your mobile site (even if the user wants to mail himself).

Your clients and prospects value having a presentable mobile Web site – render a price/performance information, product profiles, and some commentary quickly.

Ignoring Price Means Firms Have to Play Defense

Posted by Mike McLaughlin on Oct 22, 2010, in Thoughts , tagged with , , , , , , , ,

Part 2 in a series of posts regarding price competition.  Read Part 1 here.

In yesterday’s post, I suggested that price is an underutilized tool in mutual fund marketing. That the industry, while very price competitive, rarely makes that competition publicly explicit.  In light of the traditional 4P marketing mix, which Anu used to discuss PIMCO, this is like leaving 25% of the tools in the toolbox.

Of course, at one end of the spectrum you have a firm like Vanguard, where:

  • “Exceptional value”, which includes performance, service, and costs, is highlighted as a core reason to invest with the firm.

  • The words “low cost” appear consistently in marketing messages, including on the homepage of the advisor Web site.

Most every other mutual fund provider sits at the opposite end of the price-marketing spectrum.  In defining who they are, firms like Columbia, Invesco, DWS, Oppenheimer, and myriad others make no mention of fees/pricing/efficiency as part of their overall value proposition.

The danger in passive strategies toward price discussions is that they can eventually force firms to play defense.  Consider the responses of BlackRock and State Street to the recent fee reductions on Vanguard’s ETFs.  The answers are fine, but the discussion has those firms having to defend existing policies.  Without exceptional performance, “why do you charge X when another firm charges Y?” is a question nobody wants.

Introducing price more proactively is a chance for some firms to gain higher ground in marketing against the competition.  And there are subtle ways to do this.  Some tactical ideas to come next week…

The Strange Issue of Price Competition in Asset Management

Posted by Mike McLaughlin on Oct 21, 2010, in Thoughts , tagged with , , , ,

Part 1 in a series of posts regarding price competition.

Two articles from last week caught my attention.  Both centered on product pricing.  One suggested a looming price war among ETF providers, which BlackRock downplayed (FT.com, free registration required) just this morning; another reviewed the implications of Vanguard’s lower investment minimums (WSJ, registration required) for its Admiral shares.

Over the years it seems that 99.9% of all articles on fees in the asset management industry revolve around Vanguard.  But maybe my memory is selective; my experience tells me that price competition is very real across the board.

To illustrate, I spent a few minutes reviewing the mutual fund products offered to me by Merrill Lynch.  A review of available equity funds shows:

  • 1,454 have annual expense ratios lower than 1%
  • 253 have annual expense ratios below 0.25%

The 253 funds with the lowest expense ratios are offered by 31 different providers, 24 of whom have more than one fund among the group.  This is not comprehensive scientific research, but confirms what we all know.  Price is an important competitive ingredient in the industry.

So what is the “strange issue” teased in the title of this post?  It’s the fact that price, a critical competitive variable, is almost completely absent from firm and product marketing. Fees are disclosed, but there’s very little overt discussion and proactive use of pricing in marketing strategies.

Isn’t this a big missed opportunity for fund marketers?  More to come…