The new ING international fund of funds, part of the company’s just-announced product simplification campaign, is the latest among several recent offerings from financial services providers that seek to streamline complex investment products for retail customers.
The U.S. unit of the Dutch insurance and banking giant, ING Group NV, says it hopes its Diversified International Fund will succeed in the bank channel by making it easier for financial advisers to help clients diversify their overseas holdings.
“This product is a good match for advisers in the bank channel because it makes international investing easier,” said John Towle, a senior vice president of marketing in the mutual fund division of Atlanta-based ING North America Insurance Corp. “We’ve talked to advisers through our wholesale sales force, and advisers are telling us that constructing an international portfolio is one of their biggest challenges.”
Advisers whose clients want exposure to a variety of specific international fund categories, such as emerging markets, have typically needed to put their money in several funds. Funds of funds like the ING offering make diversification less complicated because their subaccounts comprise several categories, Mr. Towle said.
The new portfolio lines up with ING’s “your future, made easier” product and advertising campaign, which was announced Thursday. The campaign aims to give investors and their advisers clear-cut products, communications materials, and process improvements.
The new marketing strategy reflects ING’s recent Financial Planning and Investment Survey. Seventy-three percent of the 1,000 American consumers who participated said they would switch to a company with a reputation for making financial planning easier.
More than 42% of the brokers questioned in the survey said the amount of information, paperwork, or products offered have made their work more complex or difficult.
In recent years, fund companies have introduced investment vehicles like asset allocation and life cycle funds that are intended to simplify portfolio diversification, said Burton Greenwald, the president of BJ Greenwald Associates, a Philadelphia consulting firm.
“These are funds that are designed to defy a single, investment-box style,” he said. “There is perceived to be a market for funds that do the homework on something that investors might be challenged with.”
International funds’ standout performance for the past 18 months has led fund companies to offer more specialized international investments, he said. The Morgan Stanley Capital International Europe, Australia, and Far East index has returned 4.99% year-to-date, outperforming the Standard & Poor’s 500, at 3.03%, according to data from Morgan Stanley and Standard & Poor’s.
“Fund firms are demonstrating creativity in offering funds in these areas,” Mr. Greenwald said. “It’s not good enough to have a large-cap international fund. They’re slicing the baloney thinner, offering international funds based on region or industry.”
The ING international fund is automatically reallocated, taking into account global market changes. It competes with about a half-dozen other international funds of funds, Mr. Towle said. The portfolio targets mass-affluent investors.
