I love thinking of names for animals.
When I was 10 years old, we got two grey cats. I decided we should call the male one Graham because he was grey. At the time, it seemed obvious.
My mum named the female cat Shirley because she was “such a Shirley” (somehow, we all knew what she meant).
Then there were the small pets: Brownie, Tiptoe and Blitz the guinea pigs; Ratty and Squeedle-Squeak the hamsters; Flash the gerbil and Tommy and Klaus the goldfish.
I’m currently staying at my cousins’ house in the Gloucestershire countryside. They have a horse called Elvis because he was born pale with a black mane which stood up at the front. That, and the fact he’s the King.
They also have two cats called Thunder and Spark – named by the 7- and 9-year-old children. And a Labrador named Harry. Not after Prince Harry, as I first assumed, but after Harry Potter because he has a dark mark on his forehead shaped a bit like a lightning bolt (if you squint).
If only naming funds were this simple, and fun.
I was at an investment briefing recently and it struck me how boring fund names are.
The Investment Association lists around 4,500 funds available to UK investors. They all have names like ‘Abrdn Sterling Bond Fund’, ‘Baillie Gifford European Fund’, ‘Scottish Widows Emerging Markets Fund’ or ‘WisdomTree Emerging Markets Equity Income UCITS ETF’. I just picked those four at random, but you get the picture.
All they do is say what the fund is. Wouldn’t it be better if they were more interesting and memorable? In a sea of thousands, don’t you want your fund to stand out?
The first thing to note, and something I hadn’t considered before, is that the name of a fund has to be given the green light by an authorised corporate director (ACD).
ACDs are responsible for the running of an investment fund and according to The Investment Association, have a duty to “act in the best interests of the fund’s investors”.
Any fund name must also be cleared by the Financial Conduct Authority, which will decide whether it is “undesirable or misleading”.
When researching for this Weekend Essay, I came across a whitepaper by a non-profit group called Open Funds.
It pointed out that a fund name serves several purposes, depending on the viewpoint of the observer.
So, for investors and fund regulators, a fund name should reveal information about the investments contained within the fund, and its investment objectives.
From the fund providers’ viewpoint, the name should attract attention to the fund while supporting its marketing goals.
And finally, the fund name should serve the purpose of “clear identification”. So it should be sufficiently unique as to avoid confusion with funds offered by other providers and other funds offered by the same provider.
I was chatting to James Sullivan – former fund manager and now head of partnerships at Tyndall Investment Management – about this.
He told me that he once inherited a fund called ‘Arcturus’ – named after the brightest star in the northern constellation of Boötes.
Arcturus is the Latinised version of the ancient Greek ‘Arktouros’ and means “Guardian of the Bear”.
I think that’s pretty clever, and is certainly unique.
But Sullivan says that, in the end, it was just confusing. After all, it didn’t actually say what the fund was.
“When it was designed initially, before my arrival, everyone thought it was a clever name – bear watch, bear markets, and all that.
“But everyone was like, what is it? What does it mean? Just call it the Absolute Return or Total Return fund.”
He says he learned a lesson from looking after this fund.
“You can come up with a nice, snazzy name that means something to someone, but most of the time people just want to know what the fund does.
“I’ve gone full circle in my thoughts on it. I thought snazzy names were a cool thing. Then I realised that most people don’t want snazzy, they just want to know what they’re buying.
“It does make them stand out, but that doesn’t mean they’re standing out for the right reasons.”
In 2012, Arcturus was renamed the ‘CF Miton Total Return Fund’, which I guess proves his point.
Another article I came across was one written in January by Hedge Fund Alpha, an institutional investor intelligence service based in New York.
It said a name can play a “surprising role” in influencing investor decisions.
A name is the first thing a potential investor will see, so it should be unique and make the fund stand out. However, Hedge Fund Alpha warned that a problem with overly creative names is the chance for misunderstanding. These names can be “unclear or open to misinterpretation”.
To make a fund name unique, most fund providers choose to put their name at the front. For example, ‘Barclays Global Core Fund’ or ‘BlackRock Global Income’.
This may seem boring, but in writing this article I think my mind has also been changed.
If I were naming a fund, I might be tempted to call it the ‘Super Fun Happy Ohio Rizz Fund’. But, much as it pains me to admit it, if I did this, the fund would likely not do too well.
Unlike naming animals, naming funds should be sensible. Let’s leave the crazy names to cryptocurrencies. Still, I don’t think it would hurt to throw in the odd unusual word, just to keep investors on their toes.
