Having made it through the worst of the financial crisis, money managers are looking to restart product development initiatives that were put on hold during the downturn, according to a new study released this week from Fuse Research Network, an industry consultant.
Of 15 firms surveyed at the end of August, 71% plan to launch mutual funds in the next 18 months, and nearly half expect to get new products to market within the next six months.
That doesn't mean there will be a tsunami of new products.
“It appears that firms have become more deliberate in their product launches, as the cost in terms of dollars, resources and institutional integrity has become prohibitive,” said Michael Evans, president of Fuse Research Network.
But the willingness of money managers to entertain the idea of new products represents a shift in thinking.
During the past 12 months, firms focused on “cost rationalization,” Mr. Evans said. And 79% of the survey respondents said they had merged or liquidated funds over that span.
“Clearly, the drop in assets under management has [effected] the profitability of a significant number of mutual funds,” Mr. Evans said. “In response, firms have gone through a critical assessment of their product lines and eliminated funds that are either losing money or are not viable over the long term.”
David Hoffman is a reporter at InvestmentNews, a sister publication of Pensions & Investments