Strong Market Sparks Increase In Marketing From Mutual Funds

Wall Street Journal, Wednesday, April 26, 2006 11:45 AM
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Consumers who think they've been seeing more ads for mutual funds companies touting their performance in a robust stock market aren't wrong. The upturn in the market over the past year has led a handful of fund companies to increase advertising and marketing spending on campaigns that trumpet their performance on Wall Street. The trend has been going on since last year, when fund companies spent close to $300 million in advertising, up 6 percent from 2004 and 52 percent from 2003, according to Nielsen Monitor-Plus. Even though spending is small compared to the amounts spent by leading national advertisers such as car companies, the figures are the highest for mutual-fund firms since 2001, indicating renewed confidence in their offerings. Unlike other advertising, however, marketing efforts from mutual fund companies undergo more scrutiny from regulators, and the current spate of ads is being watched closely. The National Association of Securities Dealers, which helps monitor fund-marketing material, says it asked for revisions on 37 percent of the 90,000 mostly mutual-fund ads it reviewed last year. For instance, just last week the NASD told Guinness Atkinson Funds to pull a newspaper ad touting its global energy fund, saying the language in the ad could be misleading.
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