By RACHEL LOUISE ENSIGN

In a crowded market for exchange-traded funds, some industry heavyweights employ clever marketing to make their products stand out, Rachel Ensign reports on Markets Hub.

In a crowded market for exchange-traded funds, some industry heavyweights employ clever marketing to make their products stand out. BlackRock Inc.’s iShares is a Cirque du Soleil sponsor, while State Street Global Advisors uses a professional golfer known as Spiderman as a pitchman for its SPDR funds.

But for most companies, the way to make an impression is to come up with attention-grabbing ticker symbols. A symbol can stand out for being literal (SOIL, Global X Fertilizers/Potash), figurative (DUST, Direxion Daily Gold Miners Bear 3X) or just plain alluring (GGGG, Global X Pure Gold Miners).

“It’s kind of like when you have vanity plates on your car,” says Laura Morrison, senior vice president of global index and exchange-traded products at the New York Stock Exchange.

Dan Baxter

But finding a catchy symbol can be tough these days. Many have already been taken: 1,350 symbols are in use on the NYSE Arca alone, the biggest U.S. market for exchange-traded products. That’s up 108% over the past five years, says Ms. Morrison. In addition, fund firms have reserved 2,446 symbols for future products, with about six new ones being reserved each day, she says. Then there are the tickers of bygone ETFs, whose association with failure means many firms won’t use them.

When fund companies are preparing to launch a new ETF, they generally come up with a long list of potential ticker symbols that is often the product of a cross-departmental brainstorm. With many three-letter symbols used up, they’re focusing on four-letter ones—and considering words only elliptically related to the actual fund.

At Direxion Funds, advised by Rafferty Asset Management LLC, that list often originates with David Fajardo, the senior vice president of marketing, who is known for his ticker-symbol prowess. When the Cambridge, Mass., company was looking to give its long and short China funds catchier tickers, Mr. Fajardo came up with YINN and YANG, inspired by a yin-yang shirt his then-12-year-old son was wearing. “It immediately spoke to the fund pair being both sides of the trade,” he says.

This sort of out-of-office inspiration also led to the ticker for at least one of First Trust Portfolios’ ETFs. In 2010, Kyle Baker, in charge of launching new products at the time, was stumped about what the ticker should be for a forthcoming copper ETF. His wife, Megan, who has a background in science, suggested CU, the metal’s symbol in the periodic table of elements. That became the ETF’s ticker—and Megan, a trainee at the firm at the time, ended up landing a job there.

Global X Management Co. of New York typically goes through about 10 to 15 possible tickers before picking one that is both available and memorable, says Justin Young, head of sales. Last year, Global X introduced VROM (Global X Auto) and BARN (Global X Farming).

But a catchy symbol can’t always help a fund survive in a saturated market. Neither VROM nor BARN has attracted many investor dollars, compared with some of Global X’s older ETFs with less flashy tickers. Indeed, BARN is set to shut this month.

“All things being equal, if you’ve got a more memorable ticker symbol, then people will be remembering you more,” says Ryan Issakainen, ETF strategist at First Trust. The problem is, he says, “all things are never equal.”

Ms. Ensign is a Wall Street Journal staff reporter in New York. Email her at rachel.ensign@wsj.com.

President Obama last week presented Congress with his fourth consecutive political-stunt budget. The president’s 2013 fiscal game plan, like virtually all of his utterances, is designed to rally his base, not to put the country’s creaky fiscal house on a firm footing before it collapses in a heap like the House of Clennam in Dickens’ Little Dorrit.

While the president claimed his budget offers a balanced solution to solving the deficit, with $2.50 in spending cuts for every $1 in tax increases, a close examination reveals that these numbers are an artful exaggeration and that his plan would actually add to the nation’s debt, causing Republicans to pronounce the document a charade. This will mark the fourth consecutive year in which Congress won’t approve an Obama budget. During two of them, Democrats were the majority in both the House and the Senate.

The administration argues that its 2013 budget would reduce the deficit as a share of GDP from 8.5% in 2012 to 2.8% in 2022. Sen. Kent Conrad, the North Dakota Democrat who is chairman of the Senate Budget Committee, says the deficit equaled 10.1% of GDP when Obama took office and that the president, who sees it falling to 5.5% by early next year, has essentially delivered on a campaign promise to halve it by the end of his first term. “I believe the president’s budget continues to move the country in the right direction,” Conrad said during a budget hearing last week.

Obama claims the budget cuts the deficit by $4 trillion over 10 years, on top of the $1.2 trillion in automatic cuts mandated by last year’s Budget Control Act.

ARGUES TREASURY SECRETARY Timothy Geithner: “We govern with limited resources, and we have to make choices about how to use those resources more wisely, particularly given the millions of Americans that become eligible for Medicare and Social Security over the next few decades….We do not believe it possible to meet our national-security needs, to preserve a basic level of health care and retirement security or to compete effectively in the global economy, without some increase in revenues.”

Republicans protest that the president is employing gimmicks to conceal $1.5 trillion in spending increases. According to Wisconsin Republican Rep. Paul Ryan, the budget claims $2 trillion in savings that already are in the law, plus $1 trillion in “war savings” for money that weren’t requested by anyone.

Michigan Republican Rep. Dave Camp, the House Ways and Means Committee chairman, told Geithner, “The bottom half of earners in this country pay no federal income taxes. Meanwhile, the top 10%…pay 70% of all federal income taxes, which includes many small businesses that are critical to job creation. And, now you want people to pay more—taking as much as 45% of everything they earn? It seems to me that, in America, no matter how much money you make, the federal government should not be able to take nearly half of your income.”

The non-partisan Peter G. Peterson Foundation noted that, over 10 years, the savings would be less than $1.35 trillion. The president’s budget would see the deficit decline from $1,327 billion in 2012 to $704 billion in 2022. However, the Peterson Institute notes, by 2022, federal debt would be at 77% of GDP, higher than at any point since 1950. Writes Michael Peterson, the organization’s vice chairman: The president’s own numbers show debt rising to that level by 2022. 

E-mail:
jim.mctague@barrons.com

By RICHARD GIBSON

Perhaps nowhere is the Americanization of the planet more evident than in the restaurant world.

There’s an Applebee’s in Athens; a Papa John’s pizzeria in Karachi, Pakistan; two Ruby Tuesdays in Bucharest; a Denny’s in Christchurch, New Zealand; a Chili’s Grill & Bar on a riverboat on the Egyptian Nile. And always there are the seemingly ubiquitous outposts of McDonald’s, Domino’s and KFCs that keep popping up, like tourists on holiday, wherever one goes.

As the restaurant industry in the U.S. turns increasingly dour, major brands are turning their attention abroad, where business remains relatively robust and growing middle classes are creating large pools of consumers eager to taste affordable American-style fare.

Not only do the companies encounter less competition there than in the U.S., but newly arrived brands also typically enjoy a novelty aura that attracts the curious. Finally, many franchisers sell operating rights to local businesspeople, who assume responsibility for the restaurants day to day and send royalty payments back to the chains’ home offices, often giving the corporate owners a superior return on their investment.

“Trends continue to be in our favor,” says McDonald’s Corp. President Ralph Alvarez. “We’re growing [abroad] because demand exceeds our supply.”

Many investors in McDonald’s and multi-fast-food giant Yum Brands Inc. are holding those stocks precisely because of the perceived opportunities overseas.

This year, Burger King, McDonald’s and Papa John’s International Inc. are among chains intending to open more restaurants abroad than at home. And in laying out plans for combining Wendy’s International Inc. with its Arby’s sandwich business, Triarc Cos. said it sees substantial possibilities abroad, where both brands have relatively few outlets.

YUM, which owns Pizza Hut, Taco Bell and Long John Silver’s, along with KFC, estimates that within 10 years 70% of its profits will come from outside the U.S. Today, about 55% does.

The company is a stellar example of how to cook up overseas potential. China, a market it entered 21 years ago, today delivers about 25% of the company’s annual profits. Its KFC brand has more than 2,000 locations in 500 cities across the Chinese mainland, with restaurants that not only serve chicken but also congee soup and fried dough at breakfast. (McDonald’s, which followed KFC to China, has fewer than half that number.) Yum is even venturing into the coals-to-Newcastle business of selling its version of Chinese food to the Chinese.

With 15,000 of its 35,000 restaurants outside the U.S., Yum continues to seek out new markets. KFC soon will enter Nigeria, its 106th country. Next year Yum plans to test the popularity of its best-selling domestic brand, Taco Bell, in India.

Casual-dining operators also are trekking abroad in search of profits. Chili’s parent, Brinker International Inc., which says its long-term vision is to become the “dominant, global casual-dining restaurant portfolio company,” last year signed development agreements to expand in Australia, Canada, Ecuador, Honduras, Peru, Portugal, South Korea and Turkey.

As in the U.S., McDonald’s says, finding the right location is the company’s biggest challenge abroad. Prime real-estate targets are increasingly in suburbs ringing the cities of Europe, Asia and Latin America. The world’s largest hamburger chain, McDonald’s has more than 17,500, or about 56% of its restaurants, outside the U.S.

While McDonald’s Mr. Alvarez says that “we’re not looking for new countries” to enter, archrival Burger King has been doing just that. In fiscal 2007, the No. 2 company in hamburger restaurants behind McDonald’s went into Japan, Poland, Egypt and Indonesia. In the past two years it has opened 34 restaurants in 14 cities in Brazil alone.

Another dominant U.S. player abroad is Domino’s Pizza Inc., with some 3,500 stores, or about 40% of its total, outside the U.S. That 25-year overseas presence recently helped offset disappointing domestic results; in the last quarter, international comparable sales — free from the intense competition that has roiled the U.S. pizza market — rose 8.8% from a year ago while Domino’s domestic business experienced a 5.2% drop.

Some restaurateurs modify their menus to cater to local tastes. In some parts of Asia, for instance, McDonald’s serves rice burgers: shredded beef between rice patties. Customers in the Netherlands can order a deep-fried patty of beef ragout. In India, its Big Mac — called the Maharaja Mac — is made with chicken rather than beef. But, says Mr. Alvarez, “our core menu is still what you know in the U.S. People come to McDonald’s because they want an American product.”

Overseas success isn’t a sure bet. Papa John’s stumbled on its first foreign sojourn, when it entered Mexico in 1998. “We didn’t have our act together,” says David Flanery, president of the pizza company’s international operations. “We had the wrong franchise partner.”

As a result, the company eventually closed most of its 40-or-so stores there, found new local operators, revised its support structure and started over. Today, the Louisville-based firm has pizzerias in 28 countries.

Getty Images

Despite the allure, some big U.S. restaurateurs haven’t ventured outside North America. They include Cheesecake Factory Inc., Jack In The Box Inc., Panera Bread Co., CBRL Group‘s Cracker Barrel Old Country Store chain and Darden Restaurants Inc.. Each has indicated it sees significant growth at home.

“We periodically look at international expansion to understand where opportunities exist,” says Darden spokesman Rich Jeffers. “However, given the momentum that we have at our existing businesses and given the potential that we have with LongHorn [steakhouse], Bahama Breeze, Capital Grille and Seasons 52, we believe that our focus on domestic opportunity will consume most of our time over the next few years.” Darden does operate a smattering of Olive Garden and Red Lobster restaurants in Canada.

Write to Richard Gibson at dick.gibson@dowjones.com

Printed in The Wall Street Journal, page B5A