Targeted Musings on Financial Marketing

Cut to the chase: your ETF’s message should be simple, even if the fund is complex

20 Feb 2018

As the ETF marketplace continues to expand, asset managers are continuing to face an uphill battle in the struggle to gather investor mindshare and AUM. One of the key decisions ETF issuers must make as they craft a marketing and PR plan is how to position their fund in the increasingly crowded ETF landscape. This can be a tough nut to crack. After all, an ETF may have a number of important distinguishing characteristics and features, which could potentially benefit a wide variety of different investors. Adding to the difficulty in positioning an ETF, many asset managers have been intimately involved in the development, ideation, and creation of the fund itself, which, unfortunately, does not place them in an ideal position to dispassionately and objectively decide on what message will resonate best with investors.

The result is often a muddled, complex, nuanced narrative that relies on a number of finer points regarding the fund to communicate its value propositions; a narrative that attempts to appeal to a number of different kinds of investors all at once. And although these types of complex narratives do have their place within a marketing campaign, they certainly should not compose the top-level positioning and messaging for an ETF. In other words, ETF issuers need to strive for simplicity with their ETF marketing efforts, even when—especially when—the ETF is complex.

Related: Value Proposition Marketing: The Key to Success in ETF Marketing

How to accomplish this? Since ETF issuers are often “too close” to their funds, many turn to third party marketing agencies that can cast a more objective eye on a fund. These marketing agencies can also help distill complex messaging down to its essence, drawing out the key selling points that will entice a prospective investor to learn more.

Another important step in crafting a simplified messaging and positioning strategy for an ETF is to place one’s self in the investor’s shoes, which can be a more difficult and imaginative exercise than it sounds. Imagine having never heard of your company, your brand, or your ETF before. You encounter it on a website, at a conference, or in conversation with another investor. As an ETF issuer, what is the one thing you want that prospective investor to know about your fund? Is it the access it provides to certain sectors of the market? The exposure to a particular factor? Is it the fund’s active strategy or strategic beta? Is it the fund’s positioning for higher interest rate environments? Whatever one thing you choose to highlight about your fund will, by its very nature, exclude key details about the ETF that cannot be communicated in a pithy sentence or two. This is okay. No top-level positioning strategy is going to be up to the task of communicating a complete picture about your fund.

By honing your messaging to a simple, easily-digestible, top-level concept or selling point, ETF issuers will be well on their way to crafting an effective, impactful marketing campaign that is more likely to grab investor’s attention and gather AUM. Cutting to the chase isn’t just for the movies—ETF issuers can benefit as well.