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Despite demographics that indicate Hispanic-Americans are one of the fastest growing groups in both population and household income, the mutual fund industry has done little to market its products directly to them, industry executives say.

Figures provided by State Street Research of Boston reveal that between 1990 and 1998, the purchasing power of Hispanic-Americans increased 67 percent. Their purchasing power is expected to double again within ten years and 14 percent of the U.S. population is expected to be Hispanic by the year 2010. Research also shows that 92 percent of Hispanic people living in the U.S. feel they need to invest their money more effectively.

"I don't think companies have fully realized the potential there yet," said Steven Iverson, president and CEO of Iverson Associates, a translation agency based in Milwaukee, Wis. Iverson's company has done some translation work for Strong Funds, also of Milwaukee, Nuveen Funds of Chicago, American Century of Kansas City, Mo. and other companies. But financial service companies are not marketing directly to Hispanics, he said.

"I think companies are really missing the boat on this," he said.

Jeff Kayajanian, a vice president for retirement product sales for State Street Research of Boston, agrees.

"I think the industry doesn't know what to do and that's a horrible thing," he said. "They are used to well-monied individuals and going after the Spanish market is different." The ability to communicate in Spanish is vital to reaching the Hispanic market and most fund companies are not actively pursuing that business, he said.

While statistical and anecdotal evidence reveals a Hispanic market open to new investment options, few, if any, companies provide more than reactive services like bilingual customer support and prospectuses, said Iverson.

State Street Research became a notable exception when the company, on Feb. 10, launched one of the first bilingual websites ( offered by a mutual fund company. The move is part of a year-old marketing strategy directed towards Hispanic and Chinese-Americans.

"If you look at the ethnic markets, buying power and per capita income is growing and there is a growing understanding of financial products in general," said Miyeko Keen, an assistant vice president in charge of State Street's electronic commerce department. Keen's department designed the new website.

More than simple translations from English, State Street's bilingual website and marketing materials are adapted to the linguistic and cultural norms as well as the financial needs of specific ethnic groups, Keen said. Investor education is a primary focus of the marketing materials and the website, she said.

State Street's decision to offer a bilingual website arose from increasing demands the company was getting from its brokers for Spanish language materials, she said.

Marketing financial products in Spanish is crucial because it helps foster a sense of trust, according to Javier Jimenez, an investment executive with Wedbush Morgan Securities of Los Angeles.

"The main factor is trust," he said. "You have to realize that a lot of people have come from different countries that were economically depressed and a lot of that had to do with the government and those governments weren't the most honest and that kind of sticks with them."

But, building that loyalty will take time.

"I think in the future, there will be more literature from the fund families, but the ones that are first on the block will reap the greatest benefits with their name recognition," he said. "It's a long-term process and it's not overnight and fund families need to have patience."