Money managers launch mutual funds for various reasons. Whether the goal is to diversify investment offerings for clients, broaden distribution opportunities, embrace a new business strategy, or for some other purpose, setting up and maintaining a mutual fund can be a complicated process. Often the fund investment advisor launches the new fund.
Questions an investment advisor might consider before deciding to launch a new mutual fund include:
- What is my investment strategy and process?
- What are my business goals?
- How do I plan on raising assets?
- How will my fund differ from others?
- When do I want to complete the fund launch?
- How much does it cost to start a new fund?
- What is my breakeven point?
- How big do I want the fund to be?
- What distribution channel(s) will I use?
- Can I service the fund in-house or will I outsource?
Once a company has made the decision to launch a mutual fund, a well-defined plan must be chosen to drive the idea toward a successful launch-on time and within budget-in a competitive market.