Why is your ETF struggling to garner sufficient assets under management? There’s no one-size-fits-all answer to this question, but from where we sit as ETF marketing specialists, there are two major issues that have stood out again and again as we have watched the ETF industry grow. What follows are the two big reasons your ETF has low assets under management:
Your marketing plan lacks cohesion.
What is your ETF really all about, anyway? Of course every ETF has its nuances, but if you had only one sentence to say what your ETF’s top-line value proposition was, what would it be? Too frequently in the ETF world we see marketing plans that lack cohesion—the ETF website’s hero text may trumpet a fund’s ability to generate alpha (an actively managed ETF), while the investor education materials barely mention it at all. Meanwhile, pitch decks designed for in-person meetings put forth a third—and only obliquely related—value proposition. Setting aside the fact that different messaging may sometimes be required for different audiences (retail, FA, and institutional, respectively, are the major messaging “buckets” an ETF marketer should concern themselves with), your marketing messaging should really all point towards the same “big idea.” If it doesn’t, you’re taking two steps forward and one step back with each marketing initiative you put forward.
Make sure your marketing materials, no matter where they “live,” are working synergistically. A website visitor might see the hero text on the homepage, find it compelling, and download an investment case, to find a more-detailed message that nonetheless reinforces the topline messaging. If the investor is looking for even more information, then perhaps they return to your website to download a whitepaper, which offers near-encyclopedic detail about your fund, fleshes out the topline value propositions, while also demonstrating your firm’s mastery of the investment thesis and its underlying logic.
Poorly-executed investor education materials
Although this may read as a simple corollary to part one, in reality, strong execution of investor education materials is a make-or-break proposition when it comes to raising an ETF’s AUM. To put it bluntly, investors are unlikely to invest in your fund if they cannot understand what the fund does or how it helps further their investment goals. Often, a fatal flaw of poorly-executed investor education materials is the fact that they are drafted and assembled by the same people who designed and built the ETF. Although these experts are critical to putting together strong, cohesive ETF messaging, they are arguably “too close” to the product and may have a difficult time articulating to novice investors what is so unique about this fund.
It can often prove most useful to bring in outside marketing experts who are new to the fund to help draw out the most salient selling points. Additionally, the investor education materials in question should be written with a target audience in mind. Whether it’s Millennial retail investors dipping their toes into investing for the first time, or sophisticated financial advisors looking to gain an edge for their clients who are saving for retirement, it’s important to define—as specifically as possible—who your target audience is so that you can write to their level and speak to their needs, wants, dreams, and fears.
The Big Picture
The ETF marketplace today is too varied, crowded, and competitive to expect ETFs to garner AUM simply by virtue of their existence. In order to thrive, grow, and succeed, ETF marketing plans must be cohesive, with all marketing materials working synergistically with one another. Moreover, careful thought on audience, subject matter, and complexity must be given to investor education materials, a key component of any ETF marketing initiative.