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Monetta Dips Into Piggybank Channel


The Monetta Family of Mutual Funds in Wheaton, Ill. has devised a marketing plan aimed at tapping into the assets flowing into children's Uniform Gift to Minors custodial accounts.

The Monetta Express Kids Investment Program initially was introduced in March, but Monetta is stepping up marketing of the program in the next few months. Its efforts will include promoting the program at trade shows for children's products.

Under the program, children, through parents or grandparents, are encouraged to save for their future needs such as college expenses. The goal is to encourage kids to save and invest on a regular basis, think long-term and develop a disciplined investment program, said Diane Odom, Monetta's marketing director. The ultimate goal is to have children, ages 5 to 12, save at least $5,000 in their accounts within the next few years.

The concept of a children's investment program began with Robert Bacarella, Monetta's president. He wanted to encourage more than money simply being invested for the benefit of a child, said Odom. The educational component had to be strong and the investment offerings broad, she said.

The program, which requires a minimum investment of $250, was also designed so that five to 12 year olds can have fun while learning about mutual fund investing, said Odom.

Lessons about investing are presented in the program's 16-page activity book. Topics include diversification and the differences between planning for short- and long-term needs. The booklet also includes a simplified discussion of risk, pages to color and puzzles to solve.

The $150 million no-load fund group has even created a series of seven train car mascots - each to represent one of the seven mutual funds managed by fund manager Monetta Financial Services. The investment plan allows kids to "earn" a whimsical soft beanbag version of each toy train car as investment levels increase in accounts. Each of the train cars has a smiling face and a cute name, such as "Mickey" Mid-Cap Fund and "Betty" Balanced Fund. Each car's fund personality is conveyed in its manner of dress.

"Steady Eddie," the engine to the seven cars, is automatically sent to investors who sign up for Monetta's automatic investment plan. This program allows for periodic contributions of as little as $25 per quarter.

When accounts reach certain asset levels, the investors receive some of the other trains. Monetta ties the incentives to the actual amount of contributions made, not the current value of the account, to teach children to look beyond short-term valuations.

Since the program's introduction, Monetta has been sending information about it to existing shareholders as well as former Monetta investors. All 11,000 of Monetta's existing custodial accounts are being automatically grandfathered into the program. That means they automatically get Steady Eddy and the investment kit. But only new dollar contributions will allow children to qualify for the bean bag trains.

Although others fund advisers have tried to appeal to the children's market, Monetta's program is far more elaborate than those of its predecessors. In April 1994, Stein Roe launched its now $1.1 billion Young Investors Fund. In the fall of 1996, American Express Financial Advisors launched its Kids, Parents and Money investing program.

The children's investment market is minuscule, said Jim Folwell, a consultant with Cerulli Associates in Boston. He estimated that it accounts for not more than one percent of the $5.7 trillion in funds as of March 31, 1999.

"No one's really going after this market," said Folwell.