MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication
an InvestmentWires' Publication
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MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication |
|
Friday, April 16, 1999 Fidelity Pay-to-Play Marketing Fidelity's FundsNetwork supermarket is big enough -- over 3,300 funds -- that fund companies can feel lost in the shuffle. In order to call attention to certain funds, their managers, and holdings, Fidelity recently launched the FundsNetwork News magazine. The debut issue profiles seven managers in a "Growth vs Value" section and another three in an "International Investing" section. The fund company plans to print a second issue for the fall of 1999. Nice of them, isn't it? Well don't count on having your fund manager included just because he or she runs a successful and interesting fund -- you have to pay to play. The MutualFundWire.com has learned that the funds profiled in the issue coughed up hard cash for the privilege. Fidelity would not reveal the cost per feature, and fund companies contacted said that as part of the marketing agreement with Fidelity, terms of the deal could not be disclosed. A Fidelity spokesperson stressed that the company developed the magazine as a means of educating the customer and charges as a way to defray the publication cost of the magazine. This practice does not surprise industry observers. "It's not uncommon for supermarket sponsors to charge fund companies for a higher profile presence in venues, publications or conferences -- it's market defining," explains Peter Starr of Cerulli Associates. Granted, the magazine does get large customer eyeshare. The first copy was distributed to 1.7 million individuals and firms, thus presumably helping the fund families and specific funds get more of the inflows at the supermarket, but a good portion of the magazine is dedicated to Fidelity and the FundsNetwork itself. So what does a fund get for its money? Its chosen manager is pictured in a half-page sized box, with performance data, top 10 holdings, education information and "personal hero." He or she is also included in a Q & A session with other managers--in the initial issue of FundsNetwork News, seven managers were grouped into growth vs. value strategies, and three international managers were interviewed as a group. The funds also receive advertising in the pages of the magazine. Unfortunately, none of the fund companies contacted were able and willing to provide feedback on the value of this marketing. However, something must be working. A second issue is planned for the fall of 1999, with distribution to approximately the same number of FundsNet clients and potential investors. Printed from: MFWire.com/story.asp?s=24771 Copyright 1999, InvestmentWires, Inc. All Rights Reserved |