ETFs
Influencers occupy an important place in the world of ETFs
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In recent years, a growing number of asset managers have used influencers to build brand awareness and promote their funds. Fund managers have entered into agreements with influencers who have acquired a significant following and who endorse the companies or products on their platforms.
Invesco, for example, recently work with retired WNBA legend Candace Parker. In an April Instagram post, she compared her growth as a basketball player to the process of launching a career in investing.
“When you’re young and you’re trying to figure out your game, right, you try to stick to the basics. So you want to score a game-winning goal, you play it safe, and I think that’s how you start your investing career,” Parker said.
Invesco has partnered with Parker to promote its flagship $247 billion Invesco QQQ ETF this year, according to Matthew Heath, chief marketing officer for the Americas and Emea.
This article was previously published by catches firea title belonging to the FT group.
Invesco also worked with other influencers to strengthen its brand.
“Bring innovation into your kitchen with the 5 recipes I created with @InvescoUS for its Recipe for Innovation series” Marcus Samuelsson wrote in an Instagram post in mid-April.
Around 700,000 people follow the famous chef’s Instagram account.
Invesco’s Recipe for Innovation series promoting the QQQ fund also features other celebrity chefs, including Kristen Kish and Kwame Onwuachi.
As part of the campaign, chefs were tasked with creating a total of 25 unique dishes inspired by the 25 QQQ product companies.
BlackRock has also experimented with an influencer incentive program that promotes its iShares product line, according to a disclosure on its website.
The company “periodically” invites social media influencers to attend events and offers them gifts and entertainment, rather than cash compensation, that “may incentivize” them to create content favorable to BlackRock, according to the disclosure .
The group says incentives per person should not exceed $1,000 over a 12-month period.
The company declined to comment on its incentive programs.
New York-based ETF provider KraneShares has been using online influencers to promote its strategies since the early days of the Covid-19 pandemic, during which conference marketing opportunities were effectively shut down, according to the head of the marketing and media manager, Joseph Dube.
“Influencers are probably one of the most effective strategies,” he said. “We’re going to spend money, and I’d rather do a podcast with an influencer than run an ad on CNBC.”
KraneShares had approximately $7.8 billion in total assets under management invested in its ETFs as of March 31, according to data from Morningstar Direct.
Some of KraneShares’ most effective campaigns included its partnership with the popular Animal Spirits podcast led by Ben Carlson, director of institutional asset management at Ritholtz Wealth Management, and Michael Batnick, a Ritholtz associate, Dube said.
“[Influencers] have cultivated this audience that trusts the person, and they may feel like they’re hearing this news from a friend. For us, it’s one of the best ways to get a brand’s message across,” Dubé said.
KraneShares also worked with Adriano Starinieri, who runs the Passive Income Investing YouTube channel, which has 74,700 subscribers, according to Dube.
About 80 percent of U.S. businesses use social media influencers as part of their marketing tactics, according to a November study published in the marketing research publication Journal of Marketing.
That same study found that the median ROI for companies that use influencer marketing tactics was about 160% of the cost of hiring them.
While still a relatively nascent method for engaging potential clients, the use of influencers as a marketing tool will become more prevalent among asset managers, said Thayne Gould, senior compliance manager for the investment management consulting firm Vigilant.
“I think we’re just at the beginning now; it will grow among larger companies that have the resources to pay big influencers and move to smaller companies. This is not going to go away and will only increase,” Gould said.
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The potential for engagement is particularly pronounced among younger generations, who are much more willing to use social media to inform their financial decisions.
A 2023 survey by Forbes and market research firm Prolific found that about 79% of consumers aged 18 to 41 access financial advice through social media.
Budgets for influencer marketing strategies are also increasing, with some 20.9 percent of marketers expected to invest between $1,000 and $10,000 on influencers, while 22.8 percent spend between $100,000 and $500 000 dollars, according to a report from Oberlo.
“Many companies are beginning to integrate influencers into their social media strategies with limited success,” said Avery Stonestreet, director of marketing and digital strategy at Vident, explaining that this route also presents some compliance issues.
VanEck, for example, was fined 1.8 million dollars in February by the Security and Exchange Commission for failing to disclose to its board of directors that it had a licensing agreement with social media influencer Dave Portnoy and his company Barstool Sports.
VanEck declined to comment on its influencer engagement strategy.
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