E*Trade is willing to be flexible in price and helpful in marketing in order to attract the smaller fund companies wary of getting lost in the shuffle of a fund supermarket. The company has launched a "fund incubator" program designed to provide a platform for small and undiscovered mutual funds.
"I can't tell you how many fund companies have come to me and wanted an environment where the focus wouldn't be so concentrated on the biggest funds, where the smaller companies would have greater access to investors,"
Brian Murray, president of E*Trade Asset Management told the MFWire.com.
Although Murray would not discuss specifics of the pricing, he did acknowledge that the program would bring some funds in the door that hadn't been able to afford the 35 basis points that inclusion in the fund supermarket costs.
"No one will not get into the program based on pricing," said Murray. "Any fund company with the operational capacity to work with E*Trade will be welcome, meaning that they have to be using
Fund/SERV."
Murray added that the new program will focus marketing on the smaller funds that don't get as much attention in the aisles of a bigger fund supermarket. The broader exposure will include online events, like its new Hosted Event Series, which will interview a portfolio manager a week online. A quarter of the slots in the series will be reserved for managers participating in the fund incubator program.
E*Trade's advertising will also include more small funds, with the incubating funds' names rotated throught the standard ads.
"We're also open to the fund companies communicating to us what features they feel the program should include," said Murray. "We want the reputation of a supermarket that listens to all of the funds involved."
The "fund incubator" program is largely operational now, new features will be added over the next month, and then Murray plans to incorporate any changes that listening to fund companies' feedback leads to.
The new program should result in the addition of approximately 40 new fund families and 100 funds to the products offered through E*Trade's fund supermarket.
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