Netstock Direct's
Mutual Funds Direct Center is nearing its first anniversary, after launching in early 1999 with three funds families offering products through the Web site --
Stein Roe,
INVESCO, and
SAFECO. Although company execs will not disclose specifics of the assets gathered for fund companies through its service, the offerings now include over 200 funds from 45 fund families, with several more on the way.
The funds are essentially sold directly, connecting shareholders with the fund companies themselves, offering another distribution channel for the industry's no-load funds, which continue to have difficulties making their voices heard in ever-more-crowded universe of funds.
"Mutual fund families have been very happy with it so far," said
Marne Anderson, director of strategic partnerships for Bellevue, Washington-based Netstock Direct. "They're able to get their funds seen by large numbers of Netstock direct members -- it's a win-win situation. Especially because our investors tend to be buy-and-hold investors."
Anderson says that the typical Netstock user for its first four years of operation, one who has signed up to invest via the firm's direct investing programs, has been shown to be an "accumulator," who she said is more likely than the average investor to stay put as markets fluctuate.
The site focuses on the ease of use for mutual fund investors via one short application for potential shareholders, after filling out the overall Netstock registration. Registration with the service is free and all funds are offered on a no-transaction-fee basis. Netstock is then compensated by the fund companies via a 25 basis point 12b-1 fee.
Anderson is still marketing mainly via one-to-one presentations directly to the fund firms, but with no set-up and no maintenance costs, she says the firms are now coming to her.
The most recent addition to the program are 22 funds from
GE Capital, a fund company that has
traditionally sold its funds with loads, but recently announced that it would be
selling funds load-waived via the Web (MFWire 2/14).
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