Brand more important than product, say fund selectors

BlackRock and Carmignac have displaced JP Morgan in a ranking of asset management brands preferred by fund intermediaries.

Fund Buyer Focus surveyed more than 900 selectors to produce its report, and said the results show that brand is more important than product.

The consultancy said fund selectors chose BlackRock less for its funds’ performance, and more because the company is perceived as being reliable, strong and – because of its size – resistant to financial shocks.

“Normally in the asset management world, it’s product that really swings the decision. But for the first time, we’ve seen brands become a significant driver,” said Diana Mackay, chief executive of MackayWilliams, which co-owns Fund Buyer Focus with Metrinomics.

“The reason for that is the extreme amount of uncertainty that exists in Europe at the moment, which is part and parcel of the financial crisis. Nobody knows what to invest in and in times like that, you find there’s a retreat to what’s well known. The names that have the comfort factor.”

Last year, BlackRock attracted €14.3 billion of net inflows, excluding money market funds, according to data from Lipper, giving it the highest fund sales in the European industry.

Carmignac Gestion rose from third to second place in the brand ranking despite having well-publicised poor performance during 2011. The firm’s weekly reports to advisers, the charisma of its founder Edouard Carmignac, and the fact its brand is well-recognised by retail customers, ensured Carmignac stayed popular among fund selectors.

JP Morgan slipped from first to third place, though Mackay said the firm continues to invest in good relationships with fund selectors, which keeps its brand appeal high.

Fund Buyer Focus said third-party intermediaries account for €2 trillion in assets, which is why their opinions are so important.

“It’s not brand as the man in the street would think of it, it’s to do with what the buyers, the selectors of funds think of the asset management suppliers that are pitching to them,” said Mackay.

She said the amount asset managers spend on marketing to these players is an important factor in how they are perceived, though not the only one.

©2012 funds euorope



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