Are Asset Managers Taking The Gloves Off?

After financial services, technology is the industry that I follow most closely. Over the years, I’ve envied much of what technology communicators did that investment managers couldn’t or wouldn’t.

For example, tech companies aren’t content to leave the ranking and evaluating to the media, analysts and other third parties—it’s common for vendors to publish their own comparisons. They want a say in how their company is being positioned vis-à-vis their competitors.

By contrast, comparison of investment products has largely been done via performance tables and analysis provided by data publishers. With the exception of informal, undocumented Sales or product conversations, it hasn’t been the style of mutual fund and exchange-traded fund (ETF) companies for one firm to comment on another. In the rare event that a competitor is mentioned, it’s usually in a collegial way, as in how kasina’s Lee Kowarski quoted iShares at the InsideETFs conference this week.

Mark Wiedman of @isharesetfs @ #InsideETFs: I applaud what Vanguard is doing. Value of indices varies widely & always needs to be reviewed

Lee Kowarski (@kowarski) February 11, 2013

Lately, though, there have been a few instances where companies have stepped up and provided a basis for comparison. It’s too few and too early to call a trend but worth keeping an eye on. I might be overdoing it with my headline. I'm not suggesting that the gloves are coming off and we're about to watch a fight. I see the following, and a few other instances, as signs of a heightened competitive spirit among challenger firms in particular. 

Communications that address the competition serve at least two purposes. They help the user/advisor/investor tell companies apart. And, they demonstrate a brand’s confidence and overall personality.

That’s the benefit to the firm that’s willing to be aggressive. But what if you're on the other side, the firm that’s been named or implied in the comparison? You'll find yourself on the defense, with some communications strategizing of your own to do.

Take a look and let me know what you think.

Managing Expectations

WisdomTree doesn’t name competitors in this blog postWells Fargo Just Raised Its Dividend 14%. Does Your Dividend ETF Own It?," but for those following dividend ETFs, it’s a direct hit on two of the largest dividend ETFs.

According to this piece, indexes with strict requirements for consecutive dividend increases will not be able to own many financial firms that cut their dividends during the financial crisis. As financials’ performance improves, this could be a drag on ETFs that track the indexes. The two indexes named are what underlie the #1 and #3 dividend ETFs (Vanguard Dividend Appreciation ETF and SPDR S&P Dividend ETF), according to

Here’s what WisdomTree says, “With the financial sector recovering, we may expect to see financials be one of the leading contributors to dividend growth of the market—and backwards-looking dividend growth screens may counterintuitively hamper the respective indexes’ ability to capture that growth."

It's common for ETF providers to turn to index differences as a point of product differentiation. But note what's going on here. WisdomTree isn't citing its own products' past performance as a guarantee of future success. That's not allowed. Rather, it's planting doubts about the future performance of the indexes tracked by the front-runners' products.

Enough With The Crepe-hanging Already

The point of this eight-page Janus whitepaper, "A Gross Underestimate," is to explain why Janus believes "the glum outlook for the asset class forecasted by [PIMCO’s] Bill Gross last year misses the mark.” The piece starts with acknowledging Janus’ great respect for Gross and PIMCO, and then proceeds to offer counterarguments to Gross’ view on equities, including a “mistake” Gross made.

Watch What You Say In A Public Forum

JP Morgan guy said "unfortunately" active ETFs must provide daily transparency #backward_thinking#InsideETFs

AdvisorShares (@AdvisorShares) February 11, 2013

In this tweet from the InsideETFs conference, did @AdvisorShares suggest that a JP Morgan representative suffered from “backward thinking”? I think he did, in a tweet that’s consistent with the take no prisoners and suffer no fools communications style the firm uses on Twitter. Nobody is going to confuse AdvisorShares and its advocacy for actively managed ETFs with any other firm.