U.S. Fund Brands Make Waves in Europe
February 19, 2001
Three mutual fund companies with U.S. parents, Fidelity Investments of Boston, Chase Fleming Asset Management of Romford, England and Merrill Lynch Investment Managers of London, top the list of best recognized mutual fund names in Europe, according to a recent survey. However, one of those companies apparently achieved this status by virtue of the European company it recently acquired.
For the survey, Sector Analysis, a market research firm in London, interviewed 950 representatives of European institutions that use and distribute mutual funds, said Magnus Spence, founder and executive director of Sector Analysis. The survey was conducted in eight European countries - France, Germany, Italy, Switzerland, Sweden, the Netherlands, the U.K., and Spain.
The survey ranked asset-management companies according to the strength of their brand names as suppliers of third party, nonproprietary funds.
"Strength of brand is a very important factor in attracting investors," Spence said. "When we collect the views of organizations about how they select between the many third-party offerings, they tell us that brand-related factors, such as the reputation and credibility of the fund suppliers, are key selection criteria."
A total of 282 fund suppliers were mentioned by the participants in the survey. Fidelity Investments, Chase Fleming Asset Management and Merrill Lynch Investment Managers received more mentions than any of their competitors. These fund suppliers received more than five percent of the mentions in the survey in all eight countries. However, none of the top three had more than 10 percent of the mentions. Between them, the three fund suppliers with U.S. parents had 22 percent of the mentions, according to Sector Analysis.
Fidelity Investments was the top fund supplier with 8.7 percent of all mentions. Fidelity has spent many years constructing a market position for itself in Europe and it sells through many types of distributors, according to Sector Analysis. The combination of scope and depth, along with patience and skill has given Fidelity brand leadership, according to the survey.
Chase Fleming Asset Management was the runner up with 6.6 percent of all mentions. In a previous survey conducted in 1998 by Sector Analysis in four European countries, Flemings was also at the top of the list, according to Sector Analysis.
"Flemings is now part of Chase, [through a merger between Chase Asset Management of New York and the Robert Flemings Group of London in August of 2000] and so we recognize this in our description of the company as Chase/Flemings,'" said Spence. "But the brand that is recognized is clearly that of Flemings. Chase received hardly a mention by comparison. We now begin to understand why Flemings was bought in the first place."
Merrill Lynch Asset Management was third with 6.4 percent of all mentions. Deutsche Bank of Frankfurt and Invesco of Denver tied for fourth, each with 3.6 percent of mentions.
The three companies with U.S. parents were able to rise to the top of Europe's best-recognized mutual fund brand names "because they have patience, deep pockets, a pan-European presence and above average marketing skills," Spence said.
"Many of their competitors would have to admit to being some or all of the opposite of these things - impatient, with a short term vision, unwilling to invest, having a strong presence in just their home territory, and having a poor understanding of marketing and concepts such as brand building," he said. "It is our view that the winners in Europe will avoid these pitfalls."