Investors More Interested In Stability Than Returns
January 19, 2009
Reflecting current financial turmoil, most investors are more attuned to whether a company is viable than to its performance, according to the 2009 Investor Brandscape report from Cogent Research.
"Today, perceptions of the financial stability of a mutual fund company and its breadth of offerings are now the primary driver of investor loyalty," according to the report.
Antonio Ferreira, managing director of the wealth management group at Cogent, said, "Everyone understands investors want and expect to see strong investment performance. That's a given. But in a broad market decline and in such uncertain times, investors are obviously looking for a safe harbor. They want assurance that companies they invest with today will still be there tomorrow."
Cogent also rates mutual fund companies by investors' assessment of them, and found an 84-point spread, with Vanguard receiving the highest score, +21, and Calamos receiving the lowest score, -63. The average score is -29.
"When positive investment performance is difficult, firms must provide or promote other offerings," Ferreira said. "Thus, smaller or boutique firms with limited options will have a tough time maintaining loyalty due to lack of product or service breadth."
The top performers are Vanguard, Fidelity Advisor Funds and Fidelity Investments, with scores of 21, seven and six, respectively-the only three firms to garner positive scores.
The three bottom performers, Cogent found, are Calamos, DWS Investments and MFS Investment Management, with scores of -63, -63 and -59, respectively.
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