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Rating:Vanguard and Fido are the Stars, So Where Does Your Fund Firm Rank in Growth Potential? Not Rated 5.0 Email Routing List Email & Route  Print Print
Thursday, October 25, 2007

Vanguard and Fido are the Stars, So Where Does Your Fund Firm Rank in Growth Potential?

Reported by Erin Kello

Cogent Research has applied its predictive model to fund firms to tease out which funds will be tomorrow's Stars, Leaders, Players or Drifters, based on their growth potential.

Only two firms managed two garner Star scores, Vanguard and Fidelity. Vanguard is the lone firm to have received Star scores in all four measurement areas.

“Vanguard has serious momentum behind its mutual fund business, which is strong and getting stronger,” said Bruce Harrington, managing director of Cambridge, Massachusetts-based Cogent, in a news release. “The only weak spot for the second-place firm, Fidelity, is customer loyalty relative to the firm’s strengths in other areas.”

Meanwhile, Eaton Vance is the only firm to receive Drifter rankings in all categories. This, Cogent officials said, suggests the need for a strategic marketing campaign to build the fund firm's brand and increase loyalty.

“Financial services firms have good intelligence about where they stand today, but it is where their business will be in the future that keeps asset managers up at night,” Harrington said. “If a company has strong brand equity and wallet share among clientele, yet has low customer loyalty, it may look strong today, but it is likely to lose market share in the year ahead.”

Cogent's Investor Brandscape analysis uses customer loyalty, ownership, revenue and equity of brand to measure the strengths and weakness of each ranked company.

Some drops of knowledge gleaned from the analysis include:

- Fund firms with affiliated brokerage platforms received high scores owing to increased wallet share, greater penetration across investment accounts and stronger customer loyalty stemming from deeper relationships and association with brokerage platforms

- Customer loyalty and brand equity are often based as much on perception as personal experience with a brand

- The sizable gap between Stars and Drifters in customer loyalty suggests that those with lower scores may have a difficult time maintaining current clients, let alone capturing new ones

Fund Company Rankings:

Stars

1.Vanguard Group*
2.Fidelity Investments*

Leaders

3.American Funds
4.RiverSource*
5.Schwab/Laudus Funds*
6.T. Rowe Price*
7.Wells Fargo Funds*
8.JPMorgan Funds*
9.Morgan Stanley Investment Advisors*
10.Smith Barney/Legg Mason*
11.Fidelity Advisor Funds
12.OppenheimerFunds
13.ING Funds*

Players

14.Merrill Lynch/BlackRock*
15.Principal Financial*
16.Davis Funds
17.American Century*
18.The Hartford
19.Franklin Templeton
20.Dodge & Cox
21. Janus
22. John Hancock
23. MFS Investment Management
24. Van Kampen
25. Lord Abbett
26. DWS Scudder Funds
27. Putnam Investments
28. Goldman Sachs Funds
29. Neuberger Berman
30. Evergreen Investments
31. Oakmark

Drifters

32. Calamos
33. Dreyfus Funds*
34. AllianceBernstein
35. PIMCO
36. Columbia Funds
37. AIM
38. Eaton Vance
*Indicates that the firm has,or until recently had, an affiliatedbrokerage platform 

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