What makes for a good fund story?

More asset managers are explaining, using their words, why advisors and investors would want to invest in their funds.

You might see these rationales on fact sheets or elsewhere under the heading “Why invest” or “Why this fund.” Some of us have started calling them fund stories. I know, it’s not really a story—more like a short narrative about what the fund’s trying to do, how, and who might benefit. But “story” is handy, so let’s move on.

To the firms starting to include fund stories, great job! Always nice to explain to your customer what you’re selling. Fund stories also keep salespeople on-message and on-brand, which is usually the true reason more firms are creating them.

But some fund stories are better than others, and we’ve been asked by a few firms to explain why. So here goes.

I’m going to use two decent examples from two firms. (We’ve done fund stories for T. Rowe Price, but I’d rather use examples we have nothing to do with.)

One is a clear winner and one is just OK. (Click on the image below for a larger view.) Take a second to read both.


The winner (left) outshines the runner-up (right) across the board:

1) All right, the winner is a little long but its language is stronger—lots of active voice, sentences that read well and aren’t confusing. It’s very clear: focus (conviction) on solid, well-priced companies with big competitive advantages. The runner-up is murkier. I’m not sure what bullet two is saying—OK, some proprietary EQV mix, but why not tell us?

2) When the winner resorts to jargon (“moats”), it’s explained. Nice. “EQV” is explained, just barely, and it’s too late because it’s already in the fund name but why make us memorize yet another abbrev?

3) Beliefs are really important. Advisors and institutions can’t hear enough from portfolio managers about the beliefs that underly their thinking and investing decisions. The winner uses the occasion of the fund story to clearly state beliefs. I don’t see any beliefs in the runner-up.

4) Reading is transactional. In return for their time and cognitive energy, readers want to know why what you’ve written is relevant to them. And here’s a tip: most firms don’t do this. If you do, it immediately puts you at the top of the top decile of good communicators.

The winner is continually telling you why they do what they do. (They even explain why you might consider an SMA over a fund.) There really is no clear “why” in the runner-up. I can see a bit in bullet two, but that’s because I’ve read it a dozen times. Your readers won’t.


That’s a good start on how to construct a winning fund story. But where do you get the story itself?

Of course, read all the existing materials, decks, and the prospectus/ADV. But if you want to know what really makes an advisor or investment committee member sit up in her chair and take notice, talk to the best salespeople and product specialists.

Also speak with the portfolio managers and product marketers—not for the sake of inclusivity, but because sometimes a PM or marketer has great insight into buying decisions. It’s rare but it happens, and you don’t want to miss it.

As for how to make sense of the different things you’ll hear from all these folks, that’s for another post.