How to Market "Toxic" Funds to Investors

Posted by: Lauren Young on March 27, 2009

My editor asks this question:

If individual investors are going to be offered “toxic” asset funds, what euphemism will be used to market them? “Junk” is taken. “Trash”? “Other-Side-of-the-Tracks?

Today’s WSJ has a story about BlackRock Inc., Allianz SE’s Pacific Investment Management Co. and Legg Mason Inc. launching so-called “toxic” closed-end funds.

In recent years, the mutual fund industry, which isn’t exactly a hot-bed of marketing innovation, has moved to make the names of fund portfolios reflect underlying holdings. Thus, you’ll find plain-vanilla monikers which clearly spell out a fund’s investment objective such as T. Rowe Price Growth Stock Fund (growth stocks) or Janus High Yield (high-yield bonds).

So far, no cute marketing name has emerged to make “toxic” portfolios sound appealing or even palatable to individual investors. One of my colleagues offers up the suggestion of “Legacy Funds,” but I think that one has a geriatric tinge. “Distressed” is also taken.

How would you pitch toxic funds to masses? Put on your marketing thinking cap and let us know the best name for “toxic” portfolios.

Reader Comments

Suzanne

March 27, 2009 1:46 PM

I would call it "The Recovery Fund"--has a nice positive, forward-looking spin. If I were just joking I would call it the "Please, God?!?" fund.

Rose

March 27, 2009 1:50 PM

Fugu funds - as in the blowfish sushi that is deadly if prepared incorrectly, but is the choicest of delicacies if it is.

Ted

March 27, 2009 2:02 PM

"America's Yard Sale: Pick Your Poison"

SK

March 27, 2009 2:24 PM

I would keep it "toxic" and have Britney Spears as the spokesperson...
http://www.youtube.com/watch?v=TkIytHD5v9c

Doug

March 27, 2009 3:06 PM

"Opportunity to make a ton of money with all the risk on taxpayer funds"

JADEDRAGON

March 27, 2009 11:51 PM

I will name it as "Obama Fund" If he is a great President, the fund goes up; if he sucks, the fund goes down!

src

March 28, 2009 10:49 AM

"VIAGRA FUND", logic very simple. The investor will enjoy the ride while the taxpayer's at the receiving end.

src

March 28, 2009 10:51 AM

"VIAGRA FUND", logic very simple. The Investor will enjoy a ride while the taxpayer's at the receiving end.

Walter

March 29, 2009 8:39 AM

Why not "toxic"? The financial industry always comes up with the most dour terms anyway: "junk", "red herring"? Thats never stopped anyone from buying. If anything, its full disclosure. I'd throw a few thousand into a "toxic" fund cause I would know it should ONLY be the money I WAS gonna take to vegas.

Greg

March 29, 2009 8:54 PM

How about government backed trash for cash funds?

Steve

March 30, 2009 6:46 AM

Rather I would call it as 'Lifeline Funds'!
http://www.check2cash.co.uk/

jacob

March 31, 2009 3:19 PM

High Yield/High Risk, abbreviated HY/HR and pronounced and/or marketed as High/Higher

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About

Bloomberg Businessweek’s Ben Steverman focuses on the latest moves in financial markets and emerging trends in stocks, bonds, and funds, always with an eye toward giving readers a better understanding of the sometimes confusing and often chaotic world of money. Standard & Poor’s senior index analyst Howard Silverblatt will also provide his take on companies’ finances and the markets. Voted one of the “Top 100 Finance Blogs” in 2007.

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