Many banks are experimenting with ways to increase the growth of their proprietary mutual fund assets. One option often considered is improving the investment performance of the funds. We suggest that target marketing offers a better chance for success.
Among the factors leading to superior sales results, above-average investment performance is often cited as playing a material role. Banks with a focus on growing their proprietary funds could be tempted to try and capitalize on this assumption.
However, achieving consistently above-average investment performance is likely to be both difficult and costly-if it is possible at all.
Before investing, for example, in …