Barclays Global Investors is planning a parallel marketing and sales effort for its newly launched iPath exchange-traded notes. James Parsons, managing director, said BGI will use a combination of direct mail marketing, print advertising, white papers, training, webinars and conference calls to build awareness about ETNs. The marketing efforts will be focused on financial advisors with high-net-worth clients, according to Parsons. BGI launched two commodities ETNs earlier this month and plans to expand the line. Print newspaper ads on consecutive pages in The Wall Street Journal read, “Eliminate Market Barriers. Exchange Traded Notes give investors access to difficult-to-reach markets. Which means executing your investment strategy just got a lot easier.”
While ETNs are available in Europe, Barclays is advertising the derivatives, which guarantee the returns of a particular index minus a fee, as a new option in the U.S. exchange-traded fund mart. Investors bear the credit risk of the bank. Because ETNs are relatively unknown, Parsons said, “the advertising will be factual and focused on what is an iPath and what are the features, as opposed to trying to create some brand mystique.”
Though the ETNs are issued by Barclays Bank, they will be marketed by the same staff selling the iShares ETFs. Barclays has added web and direct marketing staff to work on its ETNs, though Parsons did not give numbers of new hires. “We will expect to have iShares and iPaths on similar indices over time,” he said. Whether ETN fees will be higher or lower than Barclays’ ETFs will depend on the index.