Delving into seldom-visited territory, The Reserve Funds of New York kicked off its new advertising campaign with a spot in The Wall Street Journal last week, urging investors to evaluate the safety and quality of money-market funds. The campaign, which boasts the benefits of The Reserve Primary Fund Class 8, cites concerns over the credit quality of money-market instruments.
Reserve, an advocate for money fund safety and an investor exclusively in non-commercial paper types of instruments, notes in its ads and its Web site that "losses or bailouts of money funds have typically been the result of commercial paper that defaulted."
"For the first time in a decade, cash-management products are top-of-mind with risk-averse investors," commented Jerry Della Femina, one of the czars of Madison Avenue, now CEO of Della Femina Rothschild Jeary & Partners, the New York agency that produced the ads. "This is a great time to advertise and build market share in this category."
However, it may not be the best
time for some money market funds. Sentiment towards these funds has soured a bit as the yields have hit all time lows recently [see MFMN 9/9/02]. In fact last week a ProFunds money market fund yield reportedly hit 0.01%.
The Reserve Primary Fund has produced a yield of 1.31% over the past 12 months, while the Reserve New York Tax-Exempt Trust is up a mere 0.64%, according to Lipper of New York.
The Reserve Funds, which manages about $18 billion in assets, will run ads in the The Wall Street Journal twice a week and once a week in Barron's for at least two months, according Cynthia Plehn, director of marketing for the company.
Plehn declined to discuss the campaign budget, but said there is no definitive ending date for the push. While not planning any events to support the advertisements, Reserve will likely contact key customers and prospects to discuss the issues with them, Plehn said.
"Each ad has a little bit of a different message along the same theme: performance and safety," she said.
And while the campaign is aimed at the institutional investor, the message applies to individual investors as well.
"Contrary to popular belief, not all money-market funds are created equal," Bruce R. Bent, chairman and CEO of The Reserve Funds and co-inventor of the world's first money market fund in 1970, said in a statement.
"With interest rates at their lowest levels in decades, money funds that are trying to squeeze out a bit more yield may hold inappropriate instruments in their portfolios," Bent said.