Funds are desperately seeking new ways of marketing funds to customers in this bear market, The Wall Street Journal reports.
For instance, in the 1990s, many companies just relied on their annual gains in the attempt to woo customers to their product.
In an advertisement in1999, the Amerindo Technology Fund, which touted its 192.6% gain. Over the past three years, as the fund has sunk an average of 38%, Amerindo makes no mention anymore of its returns.
Boasting about the returns of hot and often niche funds has always been dangerous, Vanguard founder John C. Bogle said. The advertisments came in direct contrast with the image most firms seek to convey, which is one of long-term solidarity and diversification.
Today, an overwhelming majority of these firms whose ads promised such returns in better days of the market have shown recent figures which pale in comparision, leading some to wonder if consumers were grossly misled.
Today, it would seem the general tune has changed in the fund market advertising realm. For example, T. Rowe Prices advertisements stress relative performance, noting that more than 70% of the firms mutual funds beat their one-, five- and 10-year Lipper averages through March 31. No fund returns are shown.
Perhaps more drastic, American Century is running ads emphasizing the humility of founder James E. Stowers, Jr., who eats a peanut butter sandwich for lunch each day in the company cafeteria (see MFMN 3/17/03).
The staff of Mutual Fund Market News ("MFMN") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MFMN, and have not prepared, sponsored, endorsed, or approved these summaries.