Michael Jordan, the basketball star and most famous Chicagoan since Al Capone and Mayor Daley pere, ought to start a mutual fund. Not just any mutual fund, but one designed to teach youngsters about saving and investing, about discipline and making money instead of gratification and spending money.
With him and his team, the Chicago Bulls, on the verge of a fourth National Basketball Association championship, there are incessant reminders of his endorsement prowess. It has been a boon to the sales of the limp-tasting Gatorade and ugly, overpriced Nike shoes. His coming out of retirement to return to basketball even boosted the stock prices of some companies whose products he endorses.
Mr. Jordan has stirred the most controversy for his shoe endorsements. Earlier this year, Nike unveiled a new Jordan shoe, retailing for some $140. They became an instant fashion statement among some kids and raised questions on how they, or rather their parents, can afford to buy them. That appeal of being associated with Mr. Jordan is powerful. Perhaps he could harness his marketing power to reach young people for educational purposes.
Craig Heatter, chief consultant and manager, Chase Consulting Group, New York, in a conversation a couple of years ago mentioned he would like to develop a financial version of "Hooked on Phonics," the ubiquitously advertised self-study reading program, sold through its catchy telemarketing number 1-800-ABCDEFG. Mr. Heatter, lamenting poor financial education in schools, said he would call his educational program, naturally, "Hooked on Finance." The Jordan mutual fund idea could fit well with Mr. Heatter's educational program.
"I think it's a wonderful idea," remarked Robert M. Steele, vice president-marketing at Rydex Series Trust, Rockville, Md., a company offering mutual funds with unusual strategies, when asked about the investment educational potential of Michael Jordan. But he had an important caveat. "A while back Joe Montana used to be a spokesman for Franklin/Templeton funds," Mr. Steele said. But the Securities and Exchange Commission ruled celebrities cannot endorse funds. "But if one wanted to go into the (mutual fund) business, that's OK," he added.
So why shouldn't Mr. Jordan create a family of mutual funds? His ties to the Chicago Bulls could generate all sorts of dazzling marketing connections to, say, the Wall Street bull. The Jordan fund idea isn't farfetched, not when you think of social agenda funds, like those dismissing stocks of the defense, gambling or alcoholic-beverage industries. The Jordan name on a conventional equity fund might attract interest from youngsters, who could benefit from its educational and investment value. Then one could envision other Jordan funds, such as specializing in investing in sports-related companies, including the publicly traded Boston Celtics.
Mr. Jordan, a money machine himself, could enlist money managers to become subadvisers of his funds, from huge organizations like a Merrill Lynch & Co. to minority managers like an Ariel Capital Management. The latter type of manager might especially serve as an added appeal to inner-city kids looking for minority role models.
Mr. Jordan might also work with a firm like Rydex, famed for its odd funds like the aptly named Rydex Ursa, which moves in inverse correlation to the Standard & Poor's 500 Stock Index. The Jordan funds could offer a "rebound" fund, designed to capture market upswings and named after Dennis Rodman. Instead of a family of funds Mr. Jordan could establish a league of funds, named after players, depending on the funds' risk-return potential.
For those who crave Jordan merchandise, the funds might offer investors incentives or coupons for Nike shoes or Gatorade or tickets to Bulls games or Bulls T-shirts. If that's not allowed by the SEC, then the Jordan funds could educate kids on how their returns could finance a purchase of Nike shoes - and finance is an apt word in the case of this pricey apparel.
Because of their unusual features, the Jordan funds might charge higher fees than the typical mutual funds, but there is nothing wrong with that. As they became comfortable with investing, kids and other investors might even consider the "unthinkabull" - trading a Jordan fund for a better performing, lower-cost fund.
