Targeted Musings on Financial Marketing

ETF Issuers: Why You Should Try “Hating” Your Products

08 Jul 2019

It’s no secret that an incredible amount of blood, sweat, and tears go into rolling out new ETFs. From research, to back-testing, index selection/construction, methodology formulations, navigating regulatory frameworks, and much, much more, ETF issuers invest (pun intended) an incredible amount of effort in ensuring their products find success in gathering assets once they’re launched. But bound up in this immense effort comes a certain attachment to the product; it can become incredibly difficult—if not impossible—for issuers to take a step back from an ETF to objectively evaluate its strengths and weaknesses, its idiosyncrasies and drawbacks.

See also The Biggest Mistakes to Avoid on Launch Day


Mind Your Bias

It’s precisely this blindness to your own product’s potential drawbacks in the eyes of investors that can hinder the creation of an effective marketing plan. So, what’s to be done? In order to plan and execute an effective marketing campaign, you need to be cognizant of your product’s imperfections, which means gaining a more objective perspective. Without the aid of a third party that can dispassionately assess your ETF’s flaws, it can be incredibly difficult to view your products “at arm’s length,” but there is an unorthodox solution to this issue: adopt an extreme position.

In other words, pretend, just for a few hours, that you hate your ETF. Seek out the holes in the ETF’s strategy, in its composition, its logic, the role you imagine it playing within a portfolio. Any weakness or drawback you can think of, write it down. This harsh approach to your own products may seem unnecessary or extreme, but it can be very useful in putting together an effective marketing campaign. These “holes” and imperfections will be your ammunition for tightening up your marketing language and roll-out strategy.

By taking a closer look at—and focusing exclusively on—your ETF’s weaknesses, you’ll be able to anticipate prospective investors’ potential objections or skepticism, enabling the production of marketing campaigns and investor education materials that communicate your ETF’s value propositions in a way that is relatable, effective, and impactful to even the most skeptical audiences. If you can overcome the skepticism and resistance of an imaginary investor that “hates” your product, then it should be easier still to communicate your fund’s value proposition to more receptive audiences.


The Bottom Line

“Hating” your own ETF: it may seem like an extreme approach to marketing, and it may be especially unpleasant if you have been intimately involved in the planning process of the ETF in question; but it can be an extremely effective way to probe the weak points of your ETF, especially in terms of messaging and investor education.