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AMEX Marketing Director Discusses Growth of Sub-Advised Funds

Andrew Washburn is director of marketing for American Express Funds. He joined the firm last January, after four years with Putnam and 10 years at MFS. In the past year he has helped launch Partners, American Express's new sub-advised fund line, as well as further develop its existing line of funds. Washburn discussed the evolution of American Express's offerings and the year ahead with Mutual Fund Market News reporter, Tamiko Toland.

MFMN: Tell me about your first anniversary at American Express.

Washburn: It has been, I would say, a very productive and dynamic year. For us, it's been a year of a lot of building. We've launched a number of new products this year, a new brand of mutual funds, some wrapper products, and we've introduced some new marketing programs into our advisor force. I think that going into next year, these efforts are going to begin to turn into even better business results than we've seen this year.

MFMN: What's your main focus going to be in 2002?

Washburn: 2001 was really spent around the Partners brand, which is the sub-advised family of funds. We launched six funds in 2001 and we've just filed for two more to be launched in the first quarter of 2002. We also spent effort launching a 529 plan and a donor-advised program, so heading into 2002, we're looking to do a couple of things. One is to continue to expand on the Partners product line. We think, by the end of the year, we'll have three or four Partners funds [in addition to the two in registration], bringing the Partners product line, at the end of 2002, to somewhere between 10 to 12 funds and we think we're going to have $1 to $1.5 billion of assets. We're also going to be putting some focus around the AXP fund family, the in-house managed fund line. We've already filed for three products to be launched in the first quarter under the AXP brand.

I think the robustness of our product development efforts for 2001 are clearly going to carry us through 2002. Our advisers that we distribute through today are asking for that. They want more choice of product with American Express. They want more range of product within style categories, so we're trying to meet those expectations.

The third focus for us this year, similar to a lot of our competitors, is going to be around the IRA rollover market. That is an extremely attractive and growing market for mutual fund providers and we are going to be putting much more marketing emphasis around that and integrating some of our efforts with our institutional group to cross-sell across institutional relationships and try to retain and capture additional rollover assets.

MFMN: What concepts or initiatives did you bring with you?

Washburn: [What I call] the product line rationalization was something that I brought with me and has worked with similar work I've done with prior experiences. That, I think, has really put a lot more focus and a lot more vigor around our own product line management, which is something we really didn't have before.

MFMN: What is the rationalization?

Washburn: We've got 53 funds today, and what we're trying to do is create more discipline around the management of these funds. We're trying to get them to be differentiated within their categories from each other and from our competitors. We're trying to make sure that these funds are managed to style-specific benchmarks and have tighter risk controls around them. We want the positioning of the funds that we go out into the marketplace with much clearer so our advisers, when they're looking to use American Express, have a much clearer understanding of each fund's goals and objectives.

We had products that really were just manager-driven products. They had very little process and discipline around them. I don't mean that in a negative way, but it was hard for our clients to differentiate between our three large-cap growth funds, for example. Now what we've done is create some differentiation in how they're managed and translated that into more distinct marketing messages around the products.

It's not only cleaned up the existing funds; but it's created some space for us to launch some additional products because we've got less gray area between categories.

MFMN: As far as the general concept of using the outside managers in the Partners line, do you feel that your experience working at Putnam and MFS has helped you provide a different perspective than what existed at American Express before you got here?